On Dec 3, we maintained our Outperform recommendation on
Sealed Air Corporation
). This was based on expected benefits from its restructuring
programs, recent price increases and sale of the rigid medical
Sealed Air's third-quarter adjusted net earnings improved 39%
year over year to 39 cents, helped by higher volumes and a
positive price/mix. Total revenue climbed 2% year over year to
$1.93 billion, helped by a 1.4% improvement in volume and 1.5%
improvement in price/mix.
Sealed Air raised its guidance for fiscal 2013 adjusted earnings
per share to the range $1.25 to $1.30 from $1.10 to $1.20. Net
sales guidance was changed to $7.7 billion as against prior range
of $7.7 to $7.9 billion.
Sealed Air's Integration & Optimization Program will generate
cost savings and benefits of approximately $195 million to $200
million by the end of 2014. The company is expected to realize
$90 million of benefits in 2013, of which approximately $71
million has been realized in the first three quarters of 2013.
Sealed Air has also announced an additional restructuring plan
with projected annualized savings of $80 million by 2015.
Sealed Air announced a 4-9% price increase, effective Nov 1, for
most products in its Food Care and Product Care divisions in
North America. The price hike is in response to rising
polyethylene costs and it may boost the 2014 results if
Sealed Air has agreed to sell its rigid medical packaging
business to Milwaukee-based private equity firm Mason Wells for
$125 million as it is no longer considered to be a strategic fit
for the company. The proceeds are likely to be utilized to pay
back debt and thus reduce interest expense, and thereby
contributing to margins.
Other Stocks to Consider
Some other stocks worth considering in the sector include
Clearwater Paper Corporation
ackaging Corporation of America
UFP Technologies, Inc.
). While Clearwater holds a Zacks Rank #1 (Strong Buy), Packaging
Corporation and UFP Technologies carry a Zacks Rank #2 (Buy).
CLEARWATER PAPR (CLW): Free Stock Analysis
PACKAGING CORP (PKG): Free Stock Analysis
SEALED AIR CORP (SEE): Free Stock Analysis
UFP TECH INC (UFPT): Free Stock Analysis
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