Quad Q2 swings to profit on lower interest expense

Overview

• US marketing and print services firm's Q2 net sales rose 1% yr/yr, beating analyst expectations

• Company's net earnings turned positive, driven by lower interest and operating expenses

• Quad reaffirmed full-year 2026 financial guidance and expanded packaging business with new facility

Outlook

• Quad reaffirms full-year 2026 guidance for adjusted net sales to decline 1% to 5%

• Company expects 2026 adjusted EBITDA of $175 mln to $215 mln

• Quad sees 2026 free cash flow of $40 mln to $60 mln

Result Drivers

• HIGHER PAPER AND LOGISTICS SALES - Co said Q2 net sales rose mainly due to increased paper and logistics sales

• LOWER INTEREST AND OPERATING EXPENSES - Co attributed improved net earnings to lower interest expense, depreciation and amortization, and selling, general and administrative expenses

• PRODUCTIVITY AND COST MANAGEMENT - Co said ongoing automation, AI-enabled tools and disciplined cost management supported productivity in print business lines

Company press release: ID:nPnGpPnla

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the commercial printing services peer group is "buy"

• Wall Street's median 12-month price target for Quad/Graphics Inc is $10.00, about 17.6% above its July 27 closing price of $8.50

• The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 6 three months ago

Reuters Recommended Reads

• July 28 - Omnicom Q2 revenue and adjusted EPS beat estimates on constant currency revenue growth

• July 28 - Landstar Q2 revenue beats estimates as freight transportation market "rapidly" improves

• July 28 - Clearwater Paper Q2 net loss widens as facility outage weighed on results

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)