Sealed Air, a packaging company based in Charlotte, N.C., reported a decline in profit for the third quarter. The company’s net income dropped to $56.6 million, or 39 cents per share, compared to $134.2 million, or 92 cents per share, in the same period last year. Analysts had anticipated earnings of 61 cents per share, according to FactSet.
Excluding one-time items, earnings per share were 77 cents, surpassing analysts’ estimate of 63 cents per share. Net sales also experienced a slight drop to $1.38 billion from $1.4 billion, just shy of FactSet’s prediction of $1.37 billion.
The company attributed the decline in profit to business closures and restructuring costs, as well as rising debt. Sealed Air stated that business-closure activity had a significant impact on their results, resulting in $51 million in expenses. These costs included $34 million in other restructuring associated costs, primarily related to non-cash asset impairment and inventory obsolescence charges. Additionally, there were $15 million in contract termination charges and $2 million in severance and other closure-related costs.
Sealed Air acknowledged that the weak state of its end-markets also contributed to the decline in results. While food packaging sales grew by 8%, sales in the protective business unit decreased by 14%. This decline was mainly due to destocking in the industrial and fulfillment sector.
The company’s performance aligned with its expectations, given the ongoing weakness in their end-markets.