Aug. 2 (Bloomberg) -- Sealed Air Corp., the maker of Bubble Wrap, dropped the most in more than three years after posting second-quarter earnings that trailed analysts’ estimates and announcing plans to pursue “strategic options.”
Sealed Air plunged 17 percent to $13.15 at the close in New York. The shares earlier fell as much as 27 percent, the biggest intraday decline since October 2008.
Profit excluding restructuring expenses and other one-time items was 20 cents a share, Elmwood Park, New Jersey-based Sealed Air said today in a statement. That trailed the 35-cent average of 10 estimates compiled by Bloomberg.
Sealed Air cut its full-year earnings forecast to a range of $1 to $1.10 per share, from $1.50 to $1.60 a share. That compares with the $1.38 average estimate of 11 analysts.
Chief Executive Officer William V. Hickey plans to eliminate 900 jobs this year as part of an effort to cut costs amid slower demand growth than anticipated, particularly in Europe, he said today on a conference call. Sealed Air may move out of products, business units and regions that don’t align with the company’s “core focus,” he said.
“We are currently reviewing our strategic options,” Hickey said on the call. “We are looking for what in our portfolio may not meet our criteria in any one of those categories.”
Sealed Air makes plastic packaging and entered the market for sanitizing chemicals with its purchase of Diversey Holdings Inc. last year.
The primary reason for the earnings miss was the food-packaging unit, where operating margins narrowed by 2.7 percentage points from a year earlier, Ghansham Panjabi, a New York-based analyst at Robert W. Baird & Co. who rates the shares outperform, said today in a note. The reduced forecast is “sobering” and implies earnings before interest, taxes, depreciation and amortization will be unchanged from last year, he said.
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