Consumer packaging company Sonoco Products Co. (SON - Analyst Report) declared that it will increase the price of all paperboard tubes and cores by 5%. The price hike will be effective from July 15, 2013 relating to the shipments to the US and Canada.
Paperboard tubes and cores are the elements of Sonoco’s Paper and Industrial Converted Products segment. The company hiked the price in order to recover the recently announced paperboard price increase.
Last week, Sonoco announced a $40 per ton price hike on all grades of uncoated recycled paperboard (URB) to combat increasing recovered paper and other raw material costs.
Sonoco manufactures paperboard, primarily from recycled materials for both internal use and open market sale. The majority of the company’s revenues comes from consumer packaging and Paper and Industrial Converted Products segment.
Sonoco Products, which is a global manufacturer of consumer and industrial packaging products along with Bemis Company, Inc (BMS - Analyst Report), Graphic Packaging Holding Company (GPK - Snapshot Report) and AptarGroup, Inc. (ATR - Analyst Report), posted first-quarter 2013 adjusted earnings of 50 cents per share, declined 4% year over year, while net sales dipped 3% to $1.179 billion.
The year-over-year decline in sales was attributable to lower volume and selling prices in Consumer Packaging and Paper and Industrial Converted Products segments, partially offset by volume improvement and sales price gains in the Display and Packaging and Protective Solutions segments.
Sonoco expects to increase sales to $5.5 billion to $6 billion over the next three to four years. However, uncertainty among its customers, given the slow recovery in the U.S. and ongoing European weakness, remains a headwind for the company.
South Carolina-based Sonoco is a global provider of a variety of consumer packaging, industrial products, protective packaging and packaging supply chain services. Sonoco is also the largest producer of paper-based tubes and cores in North America.
Sonoco Products currently retains a short-term Zacks Rank #3 (Hold).