Sealed Air Q3 Profit Up, Tops View; Backs FY16 EPS View, Cuts Sales Forecast

(RTTNews) - Sealed Air Corp. (SEE) on Thursday updated its forecast for fiscal 2016 after reporting higher third-quarter profit above analysts' estimates.

The company now expects full-year net sales of approximately $6.8 billion, compared to previous estimate of net sales of approximately $6.85 billion. Currency is expected to have a negative impact of approximately $225 million on net sales.

Adjusted EBITDA for the year is expected to be approximately $1.17 billion. The company now expects adjusted earnings per share to be $2.60. Previously, the company expected adjusted earnings per share to be at the high end of earlier guidance range of $2.52 to $2.60.

On average, analysts polled by Thomson Reuters expect earnings of $2.59 per share for the year on sales of $6.87 billion. Analysts' estimates typically exclude special items.

The company continues to anticipate 2016 Free Cash Flow to be approximately $550 million.

In its third quarter, net income on a reported basis was $163 million or $0.83 per share, as compared to $87 million or $0.42 per share a year ago.

Adjusted earnings per share were $0.71, compared to $0.70 last year.

Net sales of $1.72 billion decreased 1.7% from $1.75 billion a year ago. Analysts were looking for earnings of $0.69 per share on sales of $1.74 billion for the quarter.

Currency had a negative impact on total net sales of 1.8%, and the Food Care divestitures had a negative impact on total sales of 0.8%. Net sales on an organic basis increased 0.9%.

Net sales in North America increased 1.6%, EMEA declined 5.8% and Latin America and Asia Pacific also declined 2.9% and 0.6%, respectively.

On October 17, Sealed Air announced a plan to pursue the tax-free spin-off of its Diversey Care division and the food hygiene and cleaning business within its Food Care division.

The tax-free spin-off would create two independent companies, New Sealed Air, the remaining Sealed Air business, and New Diversey. The transaction is expected to be completed in the second half of 2017.