Smurfit-Stone Container Posts Improved 2Q Results
July 26, 2007 - Smurfit-Stone Container Corp. today reported a net loss available to common stockholders of $5 million, or $0.02 per diluted share, for the second quarter of 2007. These results compare to a net loss available to common stockholders of $50 million, or $0.20 per diluted share, in the prior year quarter. Sales for the second quarter 2007 were $1.87 billion, up 6 percent from second quarter 2006.
Adjusted net income for the second quarter 2007 was $0.06 per diluted share, which excluded the following items:
- A loss of $0.08 per diluted share from non-cash foreign currency
- Charges totaling $0.02 per diluted share from restructuring activities
and a loss on early extinguishment of debt, and
- A $0.02 per diluted share income tax benefit from the resolution of a
prior year tax matter.
Second quarter 2007 adjusted net income improved $0.10 per diluted share from an adjusted net loss of $0.04 per diluted share in the second quarter 2006. The adjusted net loss for the prior year quarter excluded a $0.16 per share loss related to early extinguishment of debt, non-cash foreign currency charges, and restructuring charges primarily due to the closure of corrugated container facilities.
Commenting on the quarter, Patrick Moore, chairman and CEO, said, "Smurfit-Stone's second quarter 2007 results improved both from the first quarter and year-over-year. The company benefited from higher average prices across all of our major product lines. We continued to aggressively manage containerboard inventories and reduced roll stock levels for the eighth consecutive quarter. Furthermore, we accelerated the closure of two medium mills as part of our previously announced mill realignment program. This allowed us to achieve additional savings in the second quarter."
Average domestic linerboard and container prices both improved nearly 1 percent from the first quarter 2007. Per-day box shipments improved 0.9 percent sequentially, yet were down 6.7 percent year-over-year. Shipments were impacted by the company's continued rationalization of its box plant system, actions to improve margins by exiting unprofitable business, and a sluggish U.S. packaging market. Containerboard inventories decreased slightly from the first quarter and were down 22 percent since the start of the company's strategic initiatives program in 2005.
Moore added, "From an operations perspective, we made progress on a number of initiatives during the quarter. Continued efforts around margin improvement and the implementation of price increases across a number of product grades drove higher average prices. Our strategic initiatives program remains on track and we expect to reach our 2007 cumulative savings goal of $420 million. In addition to mill realignment efforts, we closed seven converting plants and invested $75 million in capital projects as we continued to focus on improving the competitive position of our operations."
Commenting on the company's outlook, Moore said, "We anticipate higher mill production will more than offset increased fiber prices in the third quarter. The company should also benefit from continued price improvement for our products and savings from our strategic initiatives program. As a result, we expect to report improved financial results in the third quarter."
SOURCE: Smurfit-Stone Container Corp.