Bemis 2Q Profit Rises 24% On Acquisition; EPS View Raised

27th Jul 2010 13:52

DOW JONES NEWSWIRES Bemis Co.'s (BMS) second-quarter earnings rose 24% as the food-and-beverage packaging company saw strong sales growth and increased volume, aided by its March acquisition of Alcan Packaging Food Americas from Rio Tinto PLC (RTP, RIO.LN) in a $1.2 billion deal. President and Chief Executive Henry Theisen said Bemis is quickly realizing benefits from the deal, with cost savings from the integration coming at an accelerated pace. The company raised its earnings outlook for the year to $2.10 to $2.20 a share from $2 to $2.15 as it reduced capital-spending plans to $140 million from $160 million to $170 million. Bemis also forecast a third-quarter per-share profit of 55 cents to 60 cents, while analysts polled by Thomson Reuters recently projected 60 cents. Package and container makers have been reporting higher volume and demand from a year earlier, including Crown Holdings Inc. (CCK) and Packaging Corp. of America (PKG). Packaging makers that serve the food industry, such as Bemis, fared better than those geared to other sectors during the recession as consumers ate more meals at home. Bemis reported a profit of $60 million, or 54 cents a share, up from $48.5 million, or 47 cents, a year earlier. Excluding acquisition and other charges, earnings rose to 58 cents from 50 cents. The company in April projected 53 cents to 58 cents, above analysts' views at the time. Revenue increased to $1.3 billion from $866.4 million on the acquisition while organic sales--which typically exclude currency fluctuations and impacts from acquisitions and divestitures--rose 6.5%. Analysts expected $1.27 billion. Gross margin fell to 18.1% from 20.6%. Net sales rose 54% at its flexible-packaging unit, its largest segment by sales, with acquisition accounting for the vast majority of the growth. Shares recenlty rose 0.5% to $31.05 premarket. The stock is up 4% this year. -By Tess Stynes, Dow Jones Newswires; 212-416-2481; [email protected] (END) Dow Jones Newswires July 27, 2010 08:52 ET (12:52 GMT)