Greif Profit Rises, But Miss Estimates; Stock Down

(RTTNews) - Industrial packaging products maker Greif Inc. (GEF), Wednesday reported an increase in third-quarter profit on better selling prices at its paper packaging products segment. However, quarterly earnings and sales came in short of Wall Street estimates, due largely to softness at its key rigid industrial packaging business. Greif expects the business to come under pressure in the fourth quarter as well, while overall sales are expected to rise modestly.

Greif shares lost about 5 percent in after-hours trade on the New York Stock Exchange.

The results come amid a weaker food season in key regions and foreign currency exchange losses, said CEO David Fischer.

Greif, based in Delaware, Ohio, posted quarterly net earnings of $46.7 million or $0.80 per Class A share, compared with $37.5 million or $0.64 per share last year.

Results for the quarter included one-time charges of $0.04 per share.

On average, 10 analysts polled by Thomson Reuters estimated earnings of $0.89 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter rose 2.4 percent to $1.13 billion from $1.1 billion a year ago, but missed analysts' expectations of $1.15 billion.

Rigid industrial packaging sales fell by $3 million to $802 million. Volumes edged up 0.5 percent, but was offset by a 1 percent drop in selling prices.

The company expects the segment to be impacted by challenging market conditions including a delayed agricultural season lower than last year in Europe and North America.

Paper Packaging sales improved by $25 million at $208 million. Selling prices climbed 13.3 percent, reflecting the realization of two container board price increases since a year ago.

Flexible Products & Services revenues grew by $1 million to $110.5 million. Volumes climbed 5.5 percent, but selling prices slid over 6 percent. Capacity utilization challenges at the segment's new facilities are a cause of concern, the company said in a statement.

The company's stock closed Wednesday at $55.89, up $1.77 or 3.27%, on a volume of 211 thousand shares. In after hours, the stock dropped $2.79 or 4.99%.