010735 Sealed Air Earnings Fall On Supply Disruption

New York - Specialty packaging maker Sealed Air Corp. reported a 27 percent drop in second-quarter net income due to lighter volume sales and the disruption of the meat supply in Europe and said it does not expect a substantial recovery in global economic growth this year.

The Saddle Brook, New Jersey, company, which makes food and protective packaging, said it earned $39.3 million, or 30 cents per share, including restructuring and other charges, compared with $53.8 million, or 44 cents per share, a year earlier.

Sealed Air earnings were 40 cents per share before a $6.1 million restructuring charge but including the conversion of its outstanding preferred stock.

Analysts' estimates ranged from 30 cents to 44 cents, with an average of 39 cents, according to research firm Thomson Financial/First Call.

Reduced demand for packaging due to slowdowns in U.S. industry, as well as the dampening effect of mad cow disease on meat supply in Europe, cut into Sealed Air's sales and earnings.

While Chief Executive William Hickey said in a statement that the negative effect of Europe's meat supply diminished during the quarter, he added that “at this time, we do not believe a substantial recovery of economic growth around the world is likely in the second half of 2001.”

Sealed Air said it will continue to review its operations and take restructuring actions in the second half of the year. It said it expects restructuring charges for the six-month period to be similar to those in the second quarter and that it plans to cut about 230 jobs through 2002.

The company said it expects savings of about $5.5 million per year resulting from the job cuts and other restructuring by the end of 2002.

Sealed Air said net sales for the quarter rose to $761.6 million from $756.8 million a year earlier, with added sales from several acquisitions and higher average prices for some products partly offsetting lower sales volume for other goods.

Net sales for the food packing segment rose 3 percent, but sales of protective packaging fell 3 percent on lower volumes of certain products.

Shares of the company, which had gained about 24 percent since the start of the year, were up $1.13 at $39 in morning New York Stock Exchange trade. They had peaked at $44.80 in mid-May.

RETURN TO HOME PAGE

E-mail: sflanagan@sprintmail.com