11 June 2009 19:16 [Source: ICIS news]
HOUSTON (ICIS news)--Spartech’s core packaging sector should return to positive year-over-year sales growth in the second half of the year, the US plastics processor said on Thursday.
The core packaging segment’s sales were down by about 5% in the second quarter, Spartech said, compared with a 36% overall volume decline for the company.
The 5% decline was in line with industry figures, Spartech said.
“In our core business, we have a number of initiatives out there that we would expect to be able to grow in the second half,” CEO Myles Odaniell said on a conference call.
The company’s broader packaging-technologies division posted operating earnings of $10.2m (€7.3m) in the second quarter, easily besting smaller profits from the company’s custom-sheet and compounds segments.
For the quarter, net earnings for Spartech fell 14% from the same period last year, dropping to $3.8m from $4.4m in the second quarter of 2008.
While the company’s packaging business appears strong, its compounding business is still suffering from weak end-market demand in the automotive sector, Odaniell said.
Sales to the automobile market represent about 10% of total company sales, he added.
Operating earnings in the compounds segment slipped to $3.5m in the 2009 second quarter from $5m in the 2008 second quarter.
Spartech said it anticipated recession effects to linger throughout the remainder of 2009 and had adjusted its business model accordingly.
The period of inventory destocking appears to have ended after the first quarter, but replenishment thus far has been minimal, the company said.
($1 = €0.72)
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