The gloss was taken off Sonoco’s ‘strongest ever’ first quarter by its costly overheads, says the global consumer and industrial packaging company.
Net sales of US$1.12 billion were 19% higher than the US$935 million in the first quarter of 2010.
It was the company’s sixth consecutive quarter improvement, according to Sonoco chairman and CEO Harris E DeLoach Jr. He said: “Earnings improved during the quarter due to volume growth, largely due to six additional days in the current quarter, improvements in manufacturing productivity, earnings from acquisitions, lower pension costs and achieving a positive price/cost relationship. These positive factors were partially offset by higher labour, freight and energy expenses."
Sonoco’s industrial focused businesses saw a 33% year-over-year increase in operating profits for the tubes and cores/paper segment.
"Operating profits from our consumer packaging segment were modestly higher as productivity improvements, profits from acquisitions and the longer quarter were partially offset by increased operating costs," Mr DeLoach said.
Sonoco's consumer packaging segment sales reached US$459 million, compared with US$382 million in the same period in 2010. Segment operating profit was US$45.9 million in the first quarter, compared with US$45.7 million last year.
