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Sonoco Products Co. (SON) Misses Q2 EPS by 3c; Guides In-Line

July 17, 2014 7:37 AM EDT

Sonoco Products Co. (NYSE: SON) reported Q2 EPS of $0.63, $0.03 worse than the analyst estimate of $0.66. Revenue for the quarter came in at $1.25 billion versus the consensus estimate of $1.26 billion.

Sonoco Products Co. sees Q3 2014 EPS of $0.66-$0.70, versus the consensus of $0.68.

Sonoco Products Co. sees FY2014 EPS of $2.43-$2.53, versus the consensus of $2.50.

Commenting on the Company's second quarter results, President and Chief Executive Officer Jack Sanders said, "Our balanced portfolio of businesses achieved record quarterly consolidated sales and gross profits and grew base earnings 7 percent over the prior year quarter, hitting an all time best for a second quarter. However, we were somewhat disappointed that base earnings only reached the low end of our guidance as strong performances in our Paper and Industrial Converted Products and Display and Packaging segments were partially offset by lower than expected results in our Consumer Packaging and Protective Solutions segments. Overall in the quarter, the Company benefitted from improvements to manufacturing productivity, a favorable price/cost relationship, lower pension expense and acquisitions. Partially offsetting these gains were higher labor, maintenance and other operating costs while volume was virtually flat."

"Earnings in our Paper and Industrial Converted Products segment challenged all-time highs with operating profits gaining 29 percent over the prior-year quarter on a positive price/cost relationship, productivity improvements and lower pension expense, which were partially offset by higher labor and other operating costs. Segment volume was essentially flat in the quarter despite a significant reduction in demand for steel reels for the oil and gas industry. In our Protective Solutions segment, operating profits declined 15 percent due to a negative price/cost relationship and higher labor, maintenance and other operating costs, somewhat offset by favorable changes in the mix of products sold."

"Operating profits in our Consumer Packaging segment declined 10 percent in the quarter due to lower volume and a negative mix of business along with higher labor, maintenance and other operating costs. Partially offsetting these negative factors were modest productivity improvements and lower pension expense. Operating profits in our Display and Packaging segment improved 24 percent from the prior-year quarter due primarily to volume growth in domestic display and fulfillment activity along with a favorable price/cost relationship and modest productivity improvements."

For earnings history and earnings-related data on Sonoco Products Co. (SON) click here.



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