Shares of Tredegar Corporation TG have declined 7.1% since the company reported its earnings for the quarter ended June 30, 2025, compared to a 1.7% gain for the S&P 500 index over the same period. Over the past month, the stock has declined 14.4%, sharply underperforming the S&P 500’s 3.6% growth.
For the second quarter of 2025, Tredegar reported net income from continuing operations of 5 cents per share, down from 27 cents per share a year earlier.
Total sales increased 16.4% year over year to $179.1 million, driven by higher Aluminum Extrusions revenues, but were offset by weaker results in PE Films. Consolidated EBITDA from ongoing operations fell to $10 million from $17.6 million, a decrease of 43.2%.
Tredegar reported net income from continuing operations of $1.8 million, down from $9.2 million a year earlier.
Tredegar Corporation Price, Consensus and EPS Surprise
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Other Key Business Metrics
In Aluminum Extrusions, sales volume rose 16.6% to 40.7 million pounds, and net sales climbed 24.2% to $148.4 million, benefiting from higher shipments in the non-residential building & construction and specialty markets. However, EBITDA from ongoing operations dropped 28.1% to $9.3 million due to manufacturing inefficiencies, higher labor costs, and the adverse timing effects of aluminum cost pass-through. PE Films saw a 7.1% sales volume decline to 9.8 million pounds and a 15.8% revenue drop to $24.6 million, with EBITDA decreasing 33.8% to $6.7 million, mainly from lower Surface Protection volume after an exceptionally strong prior-year quarter.
Management Commentary
CEO John Steitz noted that while Aluminum Extrusions’ sales volume improved significantly compared with last year, profitability suffered from manufacturing inefficiencies in April and May, which management believes are now resolved. He also flagged a slowdown in net new orders following the June increase in Section 232 tariffs on aluminum extrusions to 50%, as customers paused purchases to assess the tariff’s permanence. For PE Films, Steitz said performance remained solid, albeit below last year’s exceptional levels, and the business has so far avoided tariff-related demand impacts, though market conditions remain uncertain.
Factors Influencing the Headline Numbers
The earnings decline was driven by segment-specific headwinds. In Aluminum Extrusions, unfavorable manufacturing costs, higher wages and lower labor productivity during a production ramp-up offset gains from higher volumes. Tariff-driven price adjustments and cost pass-throughs were insufficient to fully counter these effects. For PE Films, the pullback from last year’s extraordinary demand in Surface Protection weighed heavily, partially cushioned by cost improvements and favorable pricing. Corporate expenses also rose due to higher professional fees for business development and increased incentive compensation.
Guidance
The company projected 2025 capital expenditures of $17 million for Aluminum Extrusions and $2 million for PE Films, focusing on productivity and operational continuity. Management expects a moderation in PE Films’ performance in the second half of 2025, while tariff impacts and demand uncertainty may continue to influence Aluminum Extrusions’ order flow.
Other Developments
Tredegar’s balance sheet showed $62.6 million in total debt and $9.8 million in cash at June 30, 2025, with net debt slightly improved from year-end 2024. The company also completed a five-year, $125 million asset-based lending facility earlier in the year, with about $51 million available for borrowing at quarter-end. During the first quarter, Tredegar received $9.8 million from the post-closing settlement of the Terphane divestiture.
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This article originally published on Zacks Investment Research (zacks.com).