Sealed Air Corporation (SEE) reported a profit of 36 cents per share in the first quarter of 2010 compared to 33 cents in the year-ago period. The profit was a tad higher than the Zacks Consensus Estimate of 35 cents per share.
Sales increased 7% to $1.06 billion, driven by favorable foreign exchange rates and higher volumes, partially offset by lower price/product mix. The volume growth was witnessed in the Protective Packaging segment due to a recovery in the markets. Price/product mix implied the timing of contract price adjustments for resin costs in the company’s North American Food Packaging business.
Gross profit rose 5% to $300 million, or 28.3% of net sales, while operating profit increased 3% to $124 million, or 11.7% of net sales. Adjusted EBITDA went up 8% to $177 million, remaining unchanged at 16.7% of net sales.
Sales in the Food Packaging segment grew 5% to $447 million. Segment operating profit decreased by 4% to $57 million, or 12.6% of net sales. Sales in the Food Solutions segment rose 7% to $219 million. Segment operating profit fell 7% to $21 million, or 9.5% of net sales.
Sales in the Protective Packaging segment hiked 9% to $306.5 million. Segment operating profit went up 15% to $40 million, or 12.9% of net sales. Sales in Other Category improved 12% to $88 million due to a strong demand in Europe and China. Segment operating profit grew 81% to $8 million, or 8.6% of net sales.
Sealed Air had cash and cash equivalents of $627.5 million as of March 31, 2010. Free cash flow decreased to $97.2 million in the quarter from $159.8 million in the previous year, primarily due to an increase in inventory.
The company continues to expect an EPS of $1.50–$1.70 per share for full year 2010 based on a modest recovery, helped by a robust improvement in sales in the emerging markets.
Read the full analyst report on “SEE”
Zacks Investment Research
