Sonoco 3Q profit falls, lifts 2009 profit outlook

Sonoco 3rd-quarter profit drops but tops views, company raises full-year earnings guidance

• On 10:59 am EDT, Thursday October 22, 2009

HARTSVILLE, S.C. (AP) -- Sonoco Products Co. said Thursday that its third-quarter profit slipped 17 percent, hindered by lower volumes amid the recession and increased pension expense.

The packaging company earned $47.7 million, or 47 cents per share, compared with $57.4 million, or 57 cents per share, during the same quarter a year ago.

Excluding an 8 cents per share increase in pension expense and other items, profit was 50 cents per share.

Sonoco previously predicted quarterly earnings in a range of 42 cents to 47 cents per share.

The company's performance bested the 46 cents-per-share estimate of analysts surveyed by Thomson Reuters. Those estimates normally exclude one-time items.

Sales for the three months ended Sept. 27 dropped 12 percent to $930.6 million from $1.06 billion to miss Wall Street's estimate of $948.3 million.

Chairman, President and CEO Harris E. DeLoach Jr. said in a statement that the recession has hurt Sonoco's packaging services unit as well as businesses that cater to industrial markets. Packaging services revenue fell to $117 million from $135 million in the quarter.

Aside from lower volumes, DeLoach said revenue was pulled down by lower selling prices caused mostly by lower recovered paper costs that were being passed on.

Sonoco increased its 2009 earnings guidance to a range of $1.62 to $1.67 per share, up from a prior range of $1.55 to $1.65 per share. It also initiated a fourth-quarter profit outlook of 42 cents to 47 cents per share.

Analysts predict full-year earnings of $1.62 per share and fourth-quarter profit of 47 cents per share.

Sonoco's stock fell 86 cents, or 3 percent, to $28.25 in morning trading. Over the past year, the shares have traded in a range of $16.70 to $29.87.

Buzz up!