Sonoco Expands Product Line - Analyst Blog

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Recently, Sonoco Products Company ( SON ) launched Certis Silver packaging solutions, which is designed to provide temperature controlled packaging for moderate distribution environments. The new product offering will be available through Thermosafe Brands, one of the four businesses of Protective Packaging. The new product is based on the ISCsilver™ Ambient Temperature Profile.              

The Certis Silver solutions are powered by PureTemp™, which enables temperature control and lighter packages efficiently. In addition, the products feature non hazardous and eco-friendly Thermophase™ with reliable temperature assurance.

The introduction of Certis Silver has enabled expansion of the product portfolio of Certis off-the-shelf packaging solutions. Certis Silver solutions are cost effective in the refrigerated temperature range and also eliminate additional packaging design and qualification processes.

Earlier, Certis Gold solutions were introduced in the Certis product line. Certis Gold also offers temperature assurance like Certis Silver but under more volatile shipping and storing conditions.

The new product offerings are also diversifying the wide product range of Sonoco. Earlier, ThermoSafe Brand decided to hike prices of its products by about 4%-7%. The price hike encompassed expanded polystyrene ( EPS ) and polyurethane (PUR) products, in addition to custom and catalogued shipper solutions and components traded globally.

In the recently reported quarter, Sonoco delivered an EPS of 46 cents compared with 59 cents per share in the year-earlier quarter, which came in the mid way of the company's guidance range of 45 cents to 47 cents. The Protective packaging segment contributed 7.4% of net sales in the fourth quarter of 2011.

Sonoco continues with its strategy of growing through acquisitions. In November 2011, it completed the acquisition of Tegrant, which marked the largest acquisition ever in the company's history. It also acquired American Recycle and these acquisitions are expected to position Sonoco as the leader in multimaterial protective packaging in North America.

However, inflation in raw material, high customer concentration and a still fragile construction industry are matters of serious concern for the company. We currently have a Zacks #4 Rank (short-term Sell recommendation) on the stock.

Hartsville, South Carolina-based Sonoco is a global manufacturer of consumer and industrial packaging products. The company has more than 300 operations in 35 countries throughout North and South America, Europe, Australia and Asia.

The company operates through four reportable segments: Consumer Packaging, Paper and Industrial Converted Products, Packaging Services and Protective Packaging. Sonoco competes with Bemis Company Inc. ( BMS ) and Rock-Tenn Co. ( RKT ).


 
BEMIS ( BMS ): Free Stock Analysis Report
 
ROCK-TENN CO ( RKT ): Free Stock Analysis Report
 
SONOCO PRODUCTS ( SON ): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BMS , EPS , RKT , SON

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