AptarGroup Q3 Profit Declines, Yet Beat Estimate

10/14/2009 6:59 PM ET

(RTTNews) - Wednesday, AptarGroup, Inc. (ATR: News ), a dispensing systems supplier, said its third quarter profit declined from last year, hurt by lower sales amid the difficult economic milieu. Third quarter earnings and revenues, however, came in ahead of analysts' estimate. Looking ahead, the company also provided earnings outlook for the fourth quarter in line with analysts' expectations.

The Crystal Lake, Illinois-based AptarGroup reported net income attributable to the company for the third quarter of $33.50 million or $0.48 per share, compared to $39.65 million or $0.57 per share in the year-ago quarter.

Net income per share for the quarter included consolidation/severance expenses of about $0.03 per share. Excluding item, net income per share declined 11% to $0.51 compared to $0.57 per share in the prior year.

On average, nine analysts polled by Thomson Reuters expected the company to earn $0.47 per share, for the quarter. Analysts estimates typically exclude special items.

Net sales for the quarter decreased 11% to $473.67 million from $532.18 million in the prior-year quarter. Sales for the quarter came in ahead of the Street estimates of $466.08 million. Excluding currency effects and acquisitions, net sales for the quarter declined 7% year-over-year.

Segment wise, Beauty & Home sales for the third quarter totaled $239.62 million, down from $271.65 million a year ago, primarily due to continued weak demand from the fragrance/cosmetic market in North America and Europe.

The company's Closures segment sales declined to $124.79 million from $142.42 million last year, due to continued weak demand from the fragrance/cosmetic market in North America and Europe.

Total Pharma sales decreased to $109.26 million from $118.10 million in the previous year, primarily due to softer demand for the company's metered dose valves.

On a consolidated basis, operating income declined 12% to $52.9 million, including about $2.6 million of consolidation/severance expenses, from $60.5 million a year ago.

The company recorded facilities consolidation and severance expenses of $2.63 million for the third quarter of 2009. AptarGroup announced a plan to consolidate two French dispensing closure-manufacturing facilities and several sales offices in North America and Europe, and has subsequently expanded the program to include additional headcount reductions. The total costs associated with the consolidation/severance programs are estimated to be about $7 million, of which $3.1 million was recorded in the second quarter of 2009 and the majority of the remaining costs are expected to be recorded over the third and fourth quarters.