Alcan costs and flexible packaging sales under pin Bemis results
The company reported diluted quarterly earnings of $0.33 per share for the third quarter ended September 30 compared with $0.43 per share for the same period of last year.
Excluding acquisition-related charges and financing, and a gain on the sale of an asset, diluted earnings per share would have been $0.48 for the third quarter of 2009 compared to $0.43 per share for the same period of 2008, said the company.
The $16m costs associated with the Alcan purchase impacted shares by $0.09 per share.
The acquisition is expected to be approved by the end of this year with the transaction completed soon after that.
Net sales for the quarter totaled $898.9m; an 8.7 per cent decrease from $984.3m reported in the same quarter of 2008.
Henry Theisen, Bemis Company's president and chief executive Officer, highlighted strong performance in flexible packaging. "While overall flexible packaging volumes have decreased and selling prices have declined to reflect lower raw material costs, improved sales mix reflects increased sales volumes in value-added product lines and increased profitability,” he said.
Flexible packaging sales account for about 85 per cent of total net sales which totaled $764.1m in the third quarter. This represents a 7.5 per cent decrease compared with net sales of $826.4mi for the same period of last year.
Currency effects reduced net sales by 3.8 percent
Cost management initiatives also contributed to third quarter results, according to the company. “Our pressure sensitive materials business has been negatively impacted by the soft global economic conditions, but aggressive cost control measures are achieving sequential improvement in operating results for this business segment,” said Theisen.
The acquisition of the South American rigid packaging operations of Huhtamaki Oyj last June had a positive net sales impact of 2.2 per cent during the quarter. The remaining 5.9 per cent decrease in net sales was driven principally by lower unit volumes.
Segment operating profit for the third quarter of 2009 was $106m, or 13.9 per cent of net sales.
Excluding the effect of the gain on sale of property, operating profit for the third quarter of 2009 would have been $102.4m, or 13.4 percent of net sales. That compares with operating profit for the third quarter of 2008 of $82.4m, or 10.0 percent of net sales.
The combined effect of currency translation and foreign exchange gains decreased operating profit by $1.3m compared with the same quarter of last year. Higher operating profit this year reflects successful cost management and improved sales mix in 2009, said the company.
Commenting on performance in the flexible packaging sector, Theisen said, "The strong performance this quarter illustrates the strength and resiliency of our flexible packaging business. Our teams have focused on safety, quality, waste reduction, line speeds, and overall operational efficiency to deliver value to our shareholders and enhance Bemis' bottom line.”