Packaging and performance-based materials maker Sealed Air Corp. (SEE) on Monday posted higher profit for the fourth quarter, benefited from lower input costs, coupled with cost saving programs and price/mix management. On an adjusted basis, per share earnings topped the Street view. Net sales however dropped 2% from last year. In addition, the company issued earnings forecast for fiscal 2010.
For the fourth quarter, the Elmwood Park, New Jersey-based company's net income available to common stockholders advanced 38% to $65.1 million from $47.3 million a year ago. Earnings per share totaled $0.37, up from $0.26 earned in the prior-year quarter.
On an adjusted basis, earnings rose to $0.40 per share from $0.39 per share reported in the comparable quarter of the previous year.
On average, 12 analysts polled by Thomson Reuters expected the company to post earnings of $0.39 per share. Analysts' estimates typically exclude special items.
During the fourth quarter, Sealed Air recorded a charge of $8 million, of which $5 million is a restructuring charge related to ceasing certain operations at one of our German locations. The company expects an additional $4 million of associated costs through mid-2010 to complete the project, marking the completion of projects related to Global Manufacturing Strategy or GMS.
Quarterly net sales declined 2% to $1.15 billion from the previous year's net sales of $1.17 billion, and fell short of the $1.18 billion revenue consensus estimate of eight Street analysts.
The company noted that the 2% downturn in quarterly net sales reflects a 4% drop in volumes and a 2% decline in price/mix, partially offset by 4% favorable foreign exchange. Further, Sealed Air said volumes were primarily impacted by reduced equipment sales in Food Packaging, while lower prices on select products, primarily in Protective Packaging, impacted price/mix.
William Hickey, President and Chief Executive Officer, said, "Looking back at 2009, we are encouraged with the sequential improvement in sales even though our end markets have yet to break into positive year-over-year growth rates. Lower input costs combined with aggressive cost savings programs and price/mix management yielded strong margin growth."
Segment wise, the company's Food Packaging segment fetched fourth-quarter net sales of $503.7 million, compared to $502.5 million reported a year earlier. Total net sales for the Food Solutions division slightly decreased to $236.7 million from $237.3 million in the same quarter of last year.
Protective Packaging unit generated quarterly net sales of $324.9 million, down 4% from $338.6 million a year ago. Other net sales fell 10% to $81.1 million from $89.9 million in the three months ended December 31, 2008.
Operating profit for the latest quarter was $124.1 million, an increase of 9%, compared to $114.2 million in the corresponding period of the previous year. Earnings before income tax provision surged 63% to $87.1 million from $53.3 million in the previous year.
For the full year 2009, the company reported net income available to common stockholders of $244.3 million or $1.35 per share, compared to $179.9 million or $0.99 per share in 2008.
Adjusted net earnings for the full year was $260.3 million or $1.44 per share, up from the prior-year's earnings of $257.0 million or $1.40 per share. Twelve analysts expected the company to post earnings of $1.44 per share for the full year.
Total net sales for fiscal 2009 dropped 12% to $4.24 billion from $4.84 billion reported in the previous year, primarily reflecting 8% lower volumes and 5% unfavorable foreign exchange. Eight Wall Street analysts had a consensus revenue estimate of $4.28 billion for fiscal 2009.
Looking ahead, the company expects full-year 2010 earnings to range between $1.48 and $1.68 per share, or $1.50 and $1.70 per share on an adjusted basis, excluding a $0.02 charge related to the remaining portion of GMS. This guidance assumes an incremental $10 million of benefits from the company's GMS program in 2010, bringing the full annual estimated benefit run rate to $55 million. Analysts are looking for earnings of $1.64 per share for fiscal 2010.
Currently, the company assumes a mid-single digit percent growth in resin prices largely driven by North American commodity-class resins. For foreign currency translation, Sealed Air assumed the U.S. dollar averages $1.43 per euro in 2010.
In addition, the company projects operating expenses to be at 16%-17% of net sales. Full year effective tax rate is estimated to be 27.0% and capital expenditures are estimated to be $80 million - $100 million. The company also estimates depreciation and amortization to be $155 million and assumes about $40 million for non-cash, long-term, share-based compensation. Free cash flow is expected to exceed $300 million for the full year 2010.
Sealed Air shares, which have been trading between $10.38 and $22.99 in the past 52 weeks period, closed Friday's trading session at $20.44, down 50 cents or 2.39%.
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.