The Delaware, Ohio based company's third quarter GAAP net income rose to $48.8 million or $0.82 per Class A share from $38.3 million or $0.65 per Class A share in the similar quarter last year. Net income before special items improved to $53.2 million or $0.90 per Class A share from $42.8 million or $0.73 per Class A share in the prior year quarter.
On average, three analysts polled by First Call/Thomson Financial expected the company to earn $0.87 per share for the quarter.
Special items for the quarter included restructuring charges of $6.1 million or $4.5 million net of tax, and timberland gains of $0.1 million. For the third quarter 2006, restructuring charges were $7.1 million or $4.6 million net of tax and timberland gains of $0.4 million.
Net sales for the quarter grew 27% to $874.2 million from $690.5 million in the corresponding quarter a year ago. Excluding the impact of Blagden and Delta acquisition and including 4% gains from foreign currency translation, net sales grew 11%. Wall Street analysts estimated revenues of $866.39 million for the quarter.
Greif attributed sales growth primarily to higher sales for Industrial Packaging & Services driven by generally higher volumes, especially steel and plastic drums, benefiting from the Industrial Packaging & Services' Blagden and Delta acquisitions and strong organic growth in Europe and the emerging markets.
Third quarter operating profit, before special items, advanced to $85.9 million from $75.2 million in the comparable quarter last year. On a GAAP basis, operating profit was $79.9 million, compared to $68.5 million in the same quarter a year ago.
Gross profit rose 19% to $162.3 million from $136.7 million in the similar quarter of 2006. The increase was attributed to positive contributions from solid organic growth and the Blagden and Delta acquisitions and that of Greif Business System. Gross profit margin fell to 18.6% of net sales from 19.8% of net sales in the third quarter of 2006. The decline was associated with portfolio mix and fluctuations in raw material costs, including higher old corrugated container costs.
Selling, general & administrative expenses were $77.3 million or 8.8% of net sales, compared to $70.3 million or 10.2% of net sales in the third quarter of 2006. The dollar increase resulted primarily from the Blagden and Delta acquisitions, somewhat offset by tighter controls on expenses and the impact of acquisition integration activities.
The company declared quarterly cash dividends of $0.28 per share of Class A Common Stock and $0.42 per share of Class B Common Stock, payable on Oct. 1, 2007 to stockholders of record at close of business on Sept. 17, 2007.
The company affirmed its full year earnings guidance; excluding special items, of $3.05 - $3.10 per share for the Class A Common Stock. The Street currently expect earnings of $3.09 for the year.
GEF closed Wednesday's regular trading at $58.81, up $2.21 or $3.90%, on a volume of 300,000 shares on the NYSE. However, in after-hours trading, the stock lost $0.05 or 0.09%, trading at $58.76.
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