NEW YORK (AP) -- Shares of Sealed Air Corp. stumbled Thursday after the food packaging company reported weak second-quarter results and cut its annual guidance, pointing to the weakening economic conditions in Europe.
Sealed Air said revenue from all four of its businesses were unchanged or lower than a year ago, and lower sales in the Europe-Middle East-Africa region hurt all of those units. The Elmwood, N.J., company cut its adjusted income forecast and lowered its sales estimates because of the weaker global economy and less favorable foreign currency exchange rates.
Sealed Air stock lost $2.73, or 17.3 percent, to $13.07 in midday trading. Earlier the shares reached a three-year low of $12.65.
The company said it lost $13.7 million, or 7 cents per share, in the second quarter as it took a variety of charges related to restructuring, impairment, and the closing of a manufacturing facility in Europe. Sealed Air said it earned 20 cents per share if those and other one-time items are excluded. Revenue jumped 65 percent, to $2 billion from $1.21 billion, after it acquired privately held cleaning and sanitation services company Diversey in October.
The company reported net income of $65 million, or 37 cents per share, in the second quarter of 2011.
Analysts were forecasting net income of 35 cents per share and $2.04 billion in revenue, according to FactSet.
The company is now calling for adjusted net income of $1 to $1.10 per share in 2012, down from its previous estimate of $1.50 to $1.60 per share. Sealed Air now expects about $7.7 billion in annual revenue, saying unfavorable foreign currency exchange rates will reduce its revenue by about $400 million. The company had expected $8.2 billion to $8.3 billion in revenue, although it said in May that it would only reach the low end of that range.
Analysts are calling for net income of $1.39 per share and $8.1 billion in revenue on average.
Sealed Air said it began working to cut its spending in response to the shaky European economy, the slower pace of economic recovery, and slowing exports to China.
The company said its food packaging sales in the second quarter dipped to $499.8 million from $501.9 million a year ago. Sealed Air said reported higher prices and better sales in Latin America, but those were counteracted by lower volume in North America and Europe, the Middle East, and Africa. Sales at its food solutions unit fell 6 percent to $247.1 million on decreased equipment sales, partly because of weaker European economy. Protective packaging sales fell 3 percent to $344.6 million because of lower sales in Europe.
Revenue from totaled $816.3 million. Diversey had $876.1 million in revenue in the second quarter of 2011, before it was acquired by Sealed Air.