DUBLIN (From news reports) -- The world's largest cardboard box maker Smurfit Westrock cut its full-year core profit forecast on Wednesday, as weak demand in North America forced it to implement additional downtime in factories there in the fourth quarter.

The Ireland-headquartered company now expects full-year adjusted core earnings (EBITDA) to rise by between 4% and 8.5% to between $4.9 billion and $5.1 billion, from a previous $5.0 to $5.2 billion range.

Overview: Smurfit Westrock's third quarter "was characterized by some challenging months, specifically July in our North American region and August in Europe," said CEO Tony Smurfit on Wednesday's earnings call. "Nonetheless, we were able to come through with the numbers we predicted." The North American business has "shown great improvements" since Smurfit Kappa's acquisition of WestRock in July 2024. About 70% of North American corrugated operations now are "solidly profitable," he said. U.S. consumer packaging shipments were down 3.7%.
Asset and employee reductions: The company will continue to "rightsize the business by closing down inefficient or loss-making operations," Smurfit said, citing a total of nine closures including a "recently announced" one for a corrugated facility in California. The company filed that worker adjustment and retraining notification with the state on Oct. 14, according to a spokesperson, but the state has not publicly posted the details yet. Total company headcount has been reduced by 4,500 people since the combination, Smurfit said; during the May earnings call, he noted a to-date 1,800-person reduction just in North America. "I would hope that from the third quarter on next year, you'll start to see some positive movements ... with better quality business in all of our facilities," Smurfit said.
Containerboard: The company has recently announced about 500,000 tons worth of capacity closures for both containerboard and consumer board grades, Smurfit said. The containerboard market, namely in Europe, is "pretty bad right now. I think when it turns, it will turn very sharply," he said. "You've already seen a number of mill closures ... and I think we're going to see more. And I think that the pain is very, very real."
CRB pivot: The company is working to transition more customers away from coated recycled board and toward solid bleached sulfate and coated unbleached kraft, where the North American business has "strong positions," Smurfit said. Already, about $100 million worth of business has transitioned. As the price of SBS has come down, it's competitive with CRB, he said, plus SBS has benefits in terms of transportation costs, ability to run on printing machines and brightness. Opportunities for CUK growth include in frozen products markets. The company plans to continue offering all three grades. Some customers will still want CRB "because it's fully recycled, cheap, and that's fine, too, if people want that. But we are selling SBS," Smurfit said.
Investments: Smurfit Kappa's updated capital expenditures target for 2026 is $2.4 billion to $2.5 billion. Assets in Europe and Latin America were already well capitalized, so spending will skew slightly more toward legacy WestRock assets, Smurfit said. "We're putting a little bit more capital into some of the box plants to improve the quality and service aspect, to improve the corrugators." In addition, the company is looking to launch some energy projects soon, including a just-approved project to convert the mill in Covington, Virginia, from coal to natural gas, as well as a biomass boiler in Colombia slated to come online next year.
Outlook: Smurfit Westrock adjusted down its expectations for full-year earnings before interest, taxes, depreciation and amortization. Previously, it cited $5 billion to $5.2 billion, and now it aims for $4.9 billion to $5.1 billion. The company anticipated an uptick in demand in October, but that did not materialize, Smurfit said. Amid ongoing demand challenges, Smurfit Westrock plans to take some further production downtime at certain sites in the fourth quarter "to optimize our system," said CFO Ken Bowles. That's primarily expected to occur in North America, and will cause an additional estimated $60 million to $70 million impact to earnings.