Specialty papers maker Glatfelter (GLT) saw its profit sag 28% year over year in fourth-quarter 2012 to $7 million or 16 cents per share as costs associated with strategic initiatives and Fox River litigation, higher tax and weak economic conditions in Europe crimped its results. Glatfelter was one of the paper companies sued for polluting the Fox River.
Barring one-time items, the company recorded earnings of 26 cents per share, down from 32 cents registered a year ago. The results missed the Zacks Consensus Estimate by 9 cents.
For full-year 2012, adjusted earnings of $1.25 per share fell behind the Zacks Consensus Estimate of $1.34. Earnings, as reported, rose to $1.36 per share from 93 cents a share in 2011.
Net sales, for the fourth quarter, were essentially flat year over year at $391.4 million, beating the Zacks Consensus Estimate of $389 million. Unfavorable currency exchange swings affected sales in the quarter.
For the full year, net sales edged down 1.6% year over year to $1,577.8 million, missing the Zacks Consensus Estimate of $1,581 million.
Revenues from the core Specialty Papers unit rose 5.5% to $224.2 million in the reported quarter on higher shipping volumes. Composite Fibers sales dipped 11.9% to $105.3 million as soft demand and difficult economic conditions in Europe led to a decline in shipping volumes. Sales rose 3.3% to $61.8 million in the Advanced Airlaid Materials unit, aided by higher volumes.
Glatfelter exited 2012 with cash and cash equivalent of $97.7 million, a two-and-a-half fold year-over-year increase. Total debt rose 10% year over year to $250 million.
Glatfelter is expects to benefit from its ongoing growth initiatives. The company said that it anticipates shipping volume for Specialty Papers in first-quarter 2013 to be in line with the fourth quarter level. For both Composite Fibers and Advanced Airlaid Materials businesses, it expects shipping volumes to be 5% higher sequentially in the first quarter.
Glatfelter makes specialty papers and fiber-based engineered materials. Its offerings include security papers, book publishing papers, envelopes, converting papers, shopping bags, food and beverage paper, metalized products, composite laminates papers and feminine hygiene products.
Glatfelter currently retains a Zacks Rank #4 (Sell).
Other paper and paper products companies with favorable Zacks Rank are International Paper Company (IP), KapStone Paper and Packaging Corporation (KS) and Fibria Celulose SA (FBR). While Fibria retains a Zacks Rank #1 (Strong Buy), both International Paper and KapStone hold a Zacks Rank #2 (Buy).
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