Crown Cork & Seal has announced a drop in sales but a rise in profits for its operations in the second quarter and six months ended June 30, 2002.
Net sales in the second quarter were $1,789 million(€1,789m), 4.7 per cent below the prior year period, reflecting divested operations, lower raw material costs and volume decreases in some product lines, increased selling prices and increased volumes across some product lines.
The euro and pound sterling gained considerably against the US dollar during the month of June. Although the strengthening of the euro, pound sterling and other currencies against the US dollar was significant, the impact on the company's second quarter results was proportionately less as the company's sales and earnings are translated at average rates.
Gross profit (net sales less cost of products sold) as a percentage of net sales increased to 19.1 per cent compared to 17.2 per cent in last year's second quarter. The improvement is a result of selling price increases, improved operating performance and continuing cost reduction efforts.
Operating income in the second quarter of 2002 increased to $164 million, or 9.2 per cent of net sales, a 16.3 per cent improvement over the $141 million, or 7.5 per cent of net sales, reported in the 2001 second quarter.
John W. Conway, chairman and chief executive officer, commented: "We are pleased to report that all divisions continued to perform well compared to the prior year. The company continues to focus on its goals of remaining a low cost producer, further expanding its margins and paying down debt."
In the Americas Division operating income increased to 8.7 per cent of net sales over the 5.8 per cent in last year's second quarter. In the European Division operating income increased to 11.6 per cent of net sales from 11.5 per cent in last year's same quarter. Operating income as a percentage of net sales improved to 11.8 per cent in the Asia-Pacific Division from 7.3 per cent in the second quarter of 2001 and to 11.1 per cent for the first six months of 2002 compared to 7.1 per cent for the same period of 2001.
The company will hold a conference call today, July 16, 2002 at 11:00 am (EDT) to discuss the results. A live webcast of the conference will be made available to the public on the Internet on the company's website.