DOW JONES NEWSWIRES
Pactiv Corp.'s (PTV) second-quarter profit jumped 57% on higher
volume and margins.
Shares climbed 5.3% to $24.90 in after-hours trading as the
packaging company's earnings came in sharply higher than Wall
Street's expectations and it raised its 2009 forecast. The stock
has more than doubled from a nine-year low in March, but is still
down 18% in the past 10 months.
Chief Executive Richard Wambold said the strong volume resulted
from investments in products and service in the past two years, and
the company also benefitted from lower raw-material costs, improved
productivity, and lower logistics and utility costs.
Pactiv, which makes the Hefty line of trash bags, sandwich bags
and disposable plates, reported profit of $96 million, or 72 cents
a share, up from $61 million, or 46 cents a share, a year
earlier.
Excluding items, earnings from continuing operations rose to 73
cents a share from 50 cents. In April, Pactiv predicted earnings of
54 cents to 58 cents a share.
Revenue slid 5.3% to $901 million. Analysts estimated revenue of
$841.1 million, according to a poll by Thomson Reuters.
Pactiv said volume rose 4% though prices fell 8% and revenue was
reduced 1% by unfavorable foreign-currency exchange rates. Lower
prices reflect lower raw-material costs.
Gross margin rose to 36.2% from 26%.
Earnings grew 54% in the Hefty consumer products segment and
climbed 31% in the food-service/food-packaging business.
Looking ahead, Pactiv expects third-quarter earnings of 47 cents
to 51 cents a share. Analysts estimated earnings of 51 cents.
The company also raised its 2009 guidance to earnings of $2.37
to $2.45 a share on a sales decline of 6% to 7%. In April, it
raised the outlook to earnings of $2.15 to $2.25 a share on a sales
decline of 10% to 12%.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com