Wednesday, packaging and performance-based materials manufacturer Sealed Air Corp.(SEE) reported an increase in third quarter earnings from a year ago that topped Street view, benefiting from a reduction in charges and costs. Revenues declined 11% year-on-year reflecting the unfavorable effect of currency translation and lower protective packaging sales. Updating its outlook for fiscal 2009, the company now projects adjusted earnings above current market estimate.
The Elmwood Park, New Jersey-based company's third-quarter net income available to shareholders surged to $60.6 million or $0.34 per share from $9.2 million or $0.05 per share last year. Adjusted earnings per share was $0.38, up from $0.28 last year. On average, eleven analysts polled by Thomson Reuters expected the company to report earnings of $0.33 per share for the quarter. Analysts' estimates typically exclude special items.
Net income for the quarter under review included restructuring and other charges of $0.9 million, compared to $61.3 million in the prior year period.
Quarterly sales decreased 11% to $1.08 billion from $1.22 billion in the same period last year. Yet revenues were in line with Street estimate.
The company indicated that excluding the unfavorable effect of currency translation, sales decreased 5%, reflecting a 4% reduction in unit volumes principally in the industrial businesses and a 1% unfavorable effect of product price/mix.
Segment wise, Food Packaging recorded a constant dollar 4% increase in net sales, with operating profit rising 72% to $64 million from a year ago. While, Food Solutions registered a constant dollar 4% decrease in net sales, but operating profit for this segment increased 25% to $21 million from last year.
Protective Packaging net sales dipped 15% on a constant dollar basis, but the segment's operating profit increased 5% to $41 million from last year.
Gross profit for the quarter was $311.1 million or 28.8% of sales, an improvement from $293.7 million or 24.1% of sales in the year ago period.
Sealed Air said benefits from GMS, the cost reduction and productivity program, and travel and expense savings were approximately $20 million in the quarter.
Year-to-date, the company's net income increased to $179.2 million or $0.99 per share from $132.6 million or $0.73 per share in the corresponding period last year. Revenues for the nine-month period were $3.096 billion, down from $3.675 billion a year ago.
Looking ahead, William Hickey, president and chief executive officer stated, "we do remain cautious on fourth quarter sequential sales growth due to the uncertainty in consumer confidence and discretionary spending, particularly during the upcoming holiday shopping season."
As such, the company revised its full year 2009 outlook. Sealed Air now expects GAAP earnings per share to be in the range of $1.27 - $1.35, compared to previous guidance of $1.17 - $1.37. Excluding items, adjusted earnings per share is expected to be in the range of $1.37 - $1.45, compared to previous guidance of $1.25 - $1.45. Analysts currently project earnings of $1.36 per share.
SEE is trading at $20.27, up $0.41 or 1.96%, on a volume of about 1.52 million shares.
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