Sealed Air Corp. (SEE), a packaging equipment manufacturer, Wednesday reported a fall in earnings for the second quarter, despite a 12% rise in net sales, hurt by higher operating expenses. The company also lowered its earnings outlook for the fiscal year 2008.
The Elmwood Park, New Jersey-based company's net earnings for the second quarter were $62.6 million or $0.34 per share, lower than $73.9 million or $0.40 per share in the previous year quarter.
Net income included charges of $0.03 per share related to the impairment of investment in auction rate securities and $0.01 per share on implementation of its global manufacturing strategy.
Excluding special items, net earnings for the second quarter dropped to $0.38 per share from $0.41 per share in the same quarter a year ago. On average, nine analysts polled by First Call/Thomson Financial projected earnings of $0.40 per share for the quarter.
Total net sales for the second quarter were $1.28 billion, up 12% from $1.15 billion in the same quarter a year before. Six analysts, on average, anticipated the company to report revenues of $1.24 billion for the quarter.
Operating profit for the second quarter declined to $126.4 million or 9.9% of revenues from $134.1 million or 11.7% of revenues in the same quarter of last year.
Gross profit for the second quarter was $330.2 million, up from $323.3 million in the earlier year quarter. Gross margin declined to 25.8% from 28.2% in the comparable quarter of the prior year.
Marketing, administrative and development expenses increased to $203.3 million from $189.0 million in the preceding year quarter. Income tax provision decreased to $21.4 million from $33.6 million in the year-ago quarter.
For the six-month period, the company's net earnings were $123.4 million or $0.67 per share, down from $200.9 million or $1.07 per share in the corresponding period of the previous year.
On an adjusted basis, net earnings fell to $0.73 per share from $0.80 per share in the same period last year.
Net sales for the first six months were $2.46 billion, 10% higher than $2.24 billion in the same period of the earlier year.
The company lowered its fiscal year 2008 earnings outlook to $1.41 - $1.51 per share from its prior forecast of $1.64 - $1.74 per share. The company also lowered its adjusted earnings outlook to $1.55 - $1.65 per share from its previous outlook of $1.75 - $1.85 per share. Ten analysts, on average, expect the company to earn $1.67 per share.
Shares of Sealed Air are currently trading at $21.37, down 6 cents or 0.28%.
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