RockTenn (RKT) Warns for Q2
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RockTenn (NYSE: RKT) today announced that it expects to report adjusted earnings per share for its fiscal second quarter ending March 31, 2015, in the range of $0.70 to $0.75 per share, compared to the previous guidance of $0.80 to $0.90 per share. The consensus is $0.88.
The company's corrugated packaging business continues to perform well. Corrugated container shipments have grown during the quarter as compared to the prior year periods. Container shipments for the combined January and February 2015 period increased by 7.2% on an average week basis and 2.1% on an actual shipment basis. These volume increases exceeded comparable industry reported statistics by more than 200 basis points. Our container shipments for the March interim period reflecting shipments through March 27, 2015, were approximately 2.5% higher than average per day container shipments in March 2014.
The change in outlook for the March quarter reflects that our strong corrugated packaging volume performance has been more than offset by the following items: 1) the consequences of winter weather, including natural gas curtailment and challenging logistics execution, impacted our operations during the quarter with an estimated financial impact of approximately $0.06 per share; 2) a substantial electrical failure at our Panama City mill in early February that triggered a series of events that resulted in lost production and increased maintenance costs of approximately $0.04 per share; and, 3) lower promotional activity has reduced sales in our merchandising displays business to levels lower than the March quarter of 2014. Reduced sales of merchandising displays combined with our previously discussed operating challenges related to new business that was onboarded in 2014 contribute to our expectation that fiscal second quarter Merchandising Displays segment income will be less than that reported during the first quarter of fiscal 2015.
RockTenn will host its second quarter earnings conference call on Thursday, April 30 at 9:00 a.m. EDT. RockTenn will release its second quarter fiscal 2015 results after the market close on Wednesday, April 29, 2015.
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