Sonoco profit down on weak demand

Sonoco's 4Q profit falls on weak demand, lowers full-year forecast

Associated Press

HARTSVILLE, S.C. (AP) -- Sonoco Products Co. said Thursday that its fourth-quarter profit fell on weaker demand for its paper and industrial products, and the packaging materials company cut its forecast for the year.

The company reported net income of $29.5 million, or 29 cents per share, for the quarter that ended Dec. 31. That's down from $34.5 million, or 33 cents per share, the year before. After adjusting for costs related to restructuring, acquisitions and other items, it earned 46 cents per share versus 59 cents per share the prior year.

Sonoco's revenue was flat at $1.13 billion, despite added revenue from a recent acquisition.

The quarter fell short of analyst expectations of 47 cents per share on revenue of $1.15 billion, according to data from FactSet.

The company earned $217.5 million, or $2.13 per share, for the full year versus $201.1 million, or $1.96 per share, in 2010. Revenue rose 9 percent to $4.5 billion.

Sonoco said that it doesn't expect an improvement in demand, while changes in the value of foreign currencies and a higher tax rate will pressure on its earnings this year. Companies that sell products internationally get dinged when the dollar strengthens in value against foreign currencies. Their products are priced less competitively, and the company loses some revenue when it's translated back into dollars.

Sonoco now expects to earn $2.32 to $2.42 per share in 2012, down from its earlier forecast of $2.47 to $2.57 per share. Analysts forecast full-year earnings $2.38 per share.

The company predicted earnings of 45 cents to 50 cents per share for the first quarter, which it said is typically its weakest quarter. Analysts were expecting 54 cents per share.

Shares of the company, which is based in Hartsville, S.C., fell 44 cents, or 1.3 percent, to $32.416 in midday trading.

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