Sonoco Products Co (SON), a manufacturer of industrial and consumer packaging products, has announced an 11.81 percent rise in profit for the quarter ended Jun. 30, 2014. The company earned $61.48 million or $0.59 a share in the second-quarter compared with $54.99 million or $0.53 a share a year ago.
Revenue during the second-quarter went up marginally 1.72 percent to $1247.38 million from $1226.26 million in the last year period.
The company has reported non-GAAP adjusted earnings of $0.63 a share as against analysts' expectation of $0.66 a share.
Gross margin expanded by 43 basis points over the last year period to 18.58 percent. Total expenses as a percentage of revenues decreased to 91.85 percent from 92.49 percent in the same period last year. That has resulted in improvement of 64 basis points in operating margins to 8.15 percent.
The company reported operating income of $101.61 million, compared with operating income of $92.04 million in the previous year period.
As on Jun. 30, 2014, the company's cash balance stood at $199.78 million, up 11.38 percent or $20.42 million from Jun. 30, 2013.
Commenting on the company's second quarter results, president and CEO, Jack Sanders said, ''Our balanced portfolio of businesses achieved record quarterly consolidated sales and gross profits and grew base earnings 7 percent over the prior year quarter, hitting an all time best for a second quarter. However, we were somewhat disappointed that base earnings only reached the low end of our guidance as strong performances in our Paper and Industrial Converted Products and Display and Packaging segments were partially offset by lower than expected results in our Consumer Packaging and Protective Solutions segments. Overall in the quarter, the Company benefitted from improvements to manufacturing productivity, a favorable price/cost relationship, lower pension expense and acquisitions. Partially offsetting these gains were higher labor, maintenance and other operating costs while volume was virtually flat.''
Commenting on the earnings guidance, the company said, ''Base earnings for the third quarter of 2014 are estimated to be in the range of $.66 to $.70 per diluted share. Base earnings in the third quarter of 2013 were $.63."
Full-year 2014 base earnings guidance remains unchanged at $2.43 to $2.53 per diluted share and the company continues to target $2.51 per diluted share.
Working Capital
Sonoco Products Co has witnessed an increase in the working capital over the last one year. The company's working capital stood at $526.88 million as at Jun. 30, 2014, up $152.76 million or 40.83 percent from $374.12 million on Jun. 30, 2013. It registered an increase in current ratio to 1.56 as at Jun. 30, 2014 from 1.39 on Jun. 30, 2013.
Debt Position
Sonoco Products Co has witnessed a decline in the total debt over the last one year. As on Jun. 30, 2014, total debt stood at $1037.15 million, down 4.98 percent or $54.33 million, from Jun. 30, 2013.
The company's total debt was 25.70 percent of total assets as on Jun. 30, 2014, compared with 27.58 percent on Jun. 30, 2013. It has witnessed a decline in debt to equity ratio to 0.59 on Jun. 30, 2014 compared with 0.71 on Jun. 30, 2013.
Interest coverage ratio, which determines how easily a company can pay interest expenses on outstanding debt, has improved to 7.74 from 6.39 in the same period last year.
Shares of Sonoco Products Co declined $0.23 or 0.54 percent to settle at $42.74 on Wednesday.
