Consumer and foodservice/food packaging products maker Pactiv Corp. (PTV) Wednesday reported an increase in its profit for the third quarter, benefiting mainly from improved gross margins. The company's earnings per share topped analysts' estimates by 3 cents. In addition, the company raised its earnings guidance for fiscal 2009.
Net income attributable to the shareholders for the quarter increased to $87 million or $0.65 per share from $53 million or $0.40 per share last year.
Income from continuing operations for the third quarter rose to $73 million or $0.54 per share from $54 million or $0.40 per share in the previous year. Results of the previous year include restructuring and other charges of $1 million. On an adjusted basis, the company reported an income of $52 million or $0.39 per share for the third quarter of fiscal 2008.
On average, 10 analysts polled by Thomson Reuters expected the company to report earnings of $0.51 per share for the quarter. Analysts' estimates typically exclude special items.
The Lake Forest, Illinois-based company's total sales for the quarter declined 9% to $839 million from $925 million a year ago, reflecting 2% higher volume and 11% lower pricing. Six analysts had a consensus revenue estimate of $857.52 million for the third quarter.
By segment, Consumer sales declined 9% to $312 million from $342 million last year, reflecting 8% unfavorable pricing and a 1% volume decline. Food Packaging sales decreased 10% to $527 million from $583 million in the previous year, reflecting a 4% volume increase, 13% lower pricing, and 1% unfavorable foreign exchange.
Cost of sales declined to $573 million from $711 million in the previous year. Gross margin for the quarter improved to 31.7% from 23.1% last year.
For the nine-month period, net income rose to $274 million or $2.06 per share from $148 million or $1.12 per share in the same period of the previous year. Total sales for the period decreased to $2.51 billion from $2.68 billion a year ago.
Looking forward, the company expects fourth-quarter earnings to range from $0.48 to $0.52 per share, while analysts expect the company to report earnings of $0.51 per share.
For fiscal 2009, earnings outlook has been raised to a range of $2.44 to $2.48 from prior range of $2.37 to $2.45 per share and includes non-cash pension income of $37 million pretax, $23 million after tax, or $0.17 per share. Full-year sales are expected to decline in a range of 6% to 7%. Analysts currently expect earnings of $2.44 per share, on revenues of $3.37 billion for the full year.
PTV closed Wednesday's regular trading at $26.56, down 0.30 or 1.12%, on a volume of 2.37 million shares on the NYSE. In after hours, the stock further went down 0.06 or 0.23%, trading at $26.8726.
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