Pactiv Corp.'s (PTV) first-quarter net income more than doubled
on higher margins, because of higher prices and lower raw-material
costs, as well as tax gains.
Shares jumped 17% to $20.10 in after-hours trading as the
results topped expectations and the consumer-products maker raised
its 2009 guidance and predicted second-quarter earnings above
analysts' average estimate. The stock through regular trading
Wednesday was down 31% this year.
"Compared with the first quarter of last year, we benefited from
lower raw material costs, as well as lower logistics costs, and
improved productivity," said Chief Executive Richard L. Wambold.
However, the recession has cut sales volumes.
Looking ahead, Pactiv now expects 2009 earnings of $2.15 to
$2.25 a share on a sales decline of 10% to 12%. In January, it
forecast earnings of $1.80 to $2 on a sales decline of 12% to 15%.
Pactiv also expects second-quarter earnings of 54 cents to 58 cents
a share. Analysts surveyed by Thomson Reuters estimated 50
cents.
Meanwhile, the maker of Hefty bags and packaging products
reported net income of $91 million, or 69 cents a share, up from
$35 million, or 26 cents a share, a year earlier. The latest
results included a $100 million pretax pension contribution and
favorable tax effects of about $50 million. In January, Pactiv
forecast 44 cents to 48 cents.
Revenue dropped 5.2% to $766 million on lower volume and prices
along with the stronger dollar. Analysts most recently expected
$732.5 million.
Gross margin rose to 38.3% from 26% on the cost declines.
Sales fell 2% in the Hefty consumer products segment and dropped
7% in the food-service/food-packaging business.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com