DOW JONES NEWSWIRES
Sealed Air Corp.'s (SEE) second-quarter profit fell 3.4% on weakness in its protective packaging business as the maker of bubble wrap and plastic packaging continued to post lower sales volumes.
Packaging companies have in general been reporting higher profits the past couple weeks, with several firms boosting their expectations for the year as business increased toward the end of the quarter.
"While we did not see volume recovery in the quarter, our results tracked generally in line with first-quarter unit volume rates," said President and Chief Executive William V. Hickey in a statement Wednesday. He added Sealed Air's profit increase from its food businesses was offset by the effects of the recession on its protective packaging and specialty-materials businesses.
The company reported earnings available to common shareholders of $60.5 million, or 33 cents a share, down from $62.6 million, or 34 cents a share, a year earlier. Excluding items such as restructuring charges, earnings fell to 34 cents from 38 cents.
Net sales fell 20% to $1.03 billion, or 11% absent currency fluctuations.
Analysts surveyed by Thomson Reuters were looking for second-quarter earnings of 34 cents on revenue of $1.06 billion.
Gross margin rose to 28.1% from 25.8% despite the sales drop.
The food-packaging segment's net sales fell 14%; still earnings rose 10%. Protective packaging saw sales fall 28% on continued lower unit volumes in North America and Europe. Profit fell 34%.
Sealed Air last month sold $400 million of eight-year notes that drew stronger than expected demand. The company raised the capital, following the steps of many other firms of late, amid possible plans to repay other debt.
Looking ahead, the company again backed its full-year earnings projection, saying it expects a seasonal volume increase in its food businesses in the current quarter and a slow recovery in protective packaging and specialty materials later this year and into next year.
Shares of Sealed Air closed Tuesday at $21.48 and haven't traded premarket.
-By Kerry Grace Benn and Jenny Park, Dow Jones Newswires; 212-416-2353; kerry.benn@dowjones.com