Bemis Company, Inc. (BMS) reported third-quarter earnings of 35 cents per share, compared to 33 cents in the prior-year quarter. Earnings growth in the quarter was driven by higher sales in the Flexible Packaging segment, favorable currency translation impact and successful cost controls by the company, which were partially offset by financing impact of the pending Alcan acquisition.
 
Quarterly sales increased 4.4% year over year to $905.9 million. The second quarter acquisition of the South American rigid packaging operations of Huhtamaki Oyj contributed 3% to the third quarter sales, while a favorable currency translation effect increased the sales by 6.8%. These positive contributions were partially offset by a decline in selling prices in the Flexible Packaging business and lower sales of graphics and technical products.
 
Sales in the Flexible Packaging segment were up 5.4% compared to last year as a result of positive contribution from acquisition and favorable foreign currency translation impact partially offset by a decline in selling prices. The segment posted a 37% improvement in operating profit, reflecting successful cost management, favorable currency translation impact and increased sales volumes in value-added product lines.
 
Pressure Sensitive Materials segment sales fell 0.9% due to lower sales of graphics and technical products, partially offset by a favorable foreign currency translation effect. However, the segment’s operating profit improved a strong 61.4%, reflecting the benefits of the company’s cost management efforts, modest volume improvements in label products and favorable currency translation effects.
 
In order to raise capital for the acquisition of the Food Americas operations of Alcan Packaging from Rio Tinto plc (RTP), Bemis issued of $800 million of public bonds. The company raised another $203 million through a public stock offering of 8.2 million common shares. As a result, the company’s debt-to-capitalization ratio stood at 38.7% at the end of 2009, compared to 31.5% at the end of 2008. Also, this financing impact has reduced the company’s fourth-quarter earnings by 10 cents per share.
 
The company said that it would provide earnings guidance for 2010 after completing the pending Alcan acquisition, as the acquisition will have a significant impact on the company’s operating results. Bemis is waiting for regulatory approvals and expect to close the acquisition by the end of the first quarter of 2010. As a part of this transaction, Bemis will acquire 23 Food Americas flexible packaging facilities in the U.S., Canada, Mexico, Brazil, Argentina, and New Zealand.
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