Pactiv Corp. (PTV) reported a 14% drop in third-quarter earnings
on prior-year earnings from discontinued operations as the maker of
Hefty garbage bags and other packaging products reported higher
volume but lower margins on a jump in raw-material costs.
The company in August agreed to be acquired by New Zealand's
Rank Group Ltd. in a deal valued at about $4.4 billion. Pactiv will
become part of Rank's Reynolds Group Holdings subsidiary, which
makes food and beverage packaging and storage products, including
Reynolds aluminum foil.
Pactiv in recent quarters have been doing a balancing act
between reporting increased volume but higher raw-material costs.
Volume rose 6% in the latest quarter from a year earlier minus
acquisitions and divestitures. Hefty had 9% growth, but lower
prices.
Earnings fell to $81 million, or 60 cents a share, compared with
$94 million, or 70 cents a share a year earlier. Earnings from
continuing operations were flat at 59 cents.
Revenue increased 13% to $944 million.
Analysts' mean estimates, according to a survey by Thomson
Reuters, were for earnings of 59 cents on revenue of $939
million.
Operating margin fell to 12.3% from 17.6%. But that was offset
by income-tax costs slumping 71% on a favorable tax rule that added
16 cents a share to the bottom line.
Pactiv's shares closed Friday at $33.17. The buyout price is
$33.25.
-By Kevin Kingsbury; Dow Jones Newswires; 212-416-2354;
kevin.kingsbury@dowjones.com