DOW JONES NEWSWIRES
Smurfit-Stone Container Corp.'s (SSCC) third-quarter earnings
fell 4.4% excluding preferred-dividend impacts as the packaging
company reported higher revenue and margins on price hikes, but was
hurt by income-tax impacts.
Profit topped analysts' expectations, with Chief Executive
Officer Patrick J. Moore saying the quarter benefited from
"favorable pricing trends" and lower input costs, mostly for fiber,
as well as savings owing to its restructuring and other
initiatives.
The company said its work force was reduced by 460 positions in
the quarter and about 1,368 so far this year. Smurfit didn't say
how many employees it has and a spokesman wasn't immediately
available for comment. Overall, the company expects to cut its
overhead costs through shedding more than 14% of its backoffice
staff in 2010.
Looking ahead, Smurfit-Stone expects "moderately" lower earnings
in the fourth quarter from the third quarter on expectations that
continued price improvement will be more than offset by higher
costs. Analysts were expecting the per-share figure to drop to 52
cents from 61 cents, according to Thomson Reuters.
The packaging industry has seen demand for corrugated
containerboard improve earlier this year, pushing through two price
hikes, though an attempt in August failed amid worries about a
slowing economic recovery.
Smurfit reported a third-quarter profit of $65 million, or 65
cents a share, compared with $68 million, or 25 cents a share, a
year earlier. Shares outstanding fell 61% as the company exited
bankruptcy earlier this year. The latest quarter included 11 cents
of charges.
Revenue climbed 15% to $1.63 billion.
Analysts polled by Thomson Reuters most recently forecast
earnings of 61 cents a share on revenue of $1.66 billion.
Gross margin soared to 17.7% from 9.4% amid the price hikes. But
that was offset by a $49 million income-tax provision in the latest
quarter, compared with a $2 million benefit last year.
The results come as Smurfit is about to see changes at the helm.
Moore plans to retire by early next year, announced in August.
Searches are under way to fill his post and to find a chief
financial officer. On Wednesday, President and Chief Operating
Officer Steven J. Klinger unveiled plans to resign effective at
year's end. The company's general counsel, Craig A. Hunt, adds the
chief administrative officer role starting Monday.
Shares closed Friday at $23 and were inactive premarket.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com