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Sonoco Teams Up With Cathay Pacific to Lease PharmaPort 360

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Sonoco Products Company (SON - Free Report) recently entered into a global partnership agreement with Cathay Pacific Cargo — one of the world’s largest air cargo carriers. This deal will enable pharmaceutical shippers to lease Sonoco ThermoSafe’s PharmaPort 360 temperature-controlled bulk shipping containers directly from Cathay Pacific Cargo.

Sonoco ThermoSafe — a unit of Sonoco — acquired PharmaPort 360 assets, licenses, trademarks and manufacturing rights from AAR Cold Chain Solutions in 2016. The PharmaPort 360 uses proprietary hybrid technology to ensure extremely precise +5C temperature control. The FAA (Federal Aviation Administration) approved containers are designed to safely ship temperature-sensitive pharmaceuticals, blood plasma, and other biological cargo via air or ground. The containers are also easy to use and versatile across transportation modes.

Per the deal, the PharmaPort 360 will provide active container solution to the impressive Pharma LIFT portfolio of Cathay Pacific Cargo. Its advanced remote monitoring and data logging through GPS Tracking and GSM Monitoring systems will also benefit Cathay Pacific by allowing 24/7 retrieval, analysis and sharing of system information.

Moreover, Sonoco’s reputation for quality products and high standards for service delivery has led the above-mentioned collaboration which will provide customers of Cathay Pacific a consistent solution for the transportation of vital and life-saving pharmaceutical products. On the other hand, the partnership will assist Sonoco’s ThermoSafe business.

Notably, Sonoco remains aligned on implementing its Grow and Optimize strategy in 2018. The company will continue to focus on optimizing businesses through process improvement, standardization, cost control and commercial excellence. Its focus on thermoformed plastics, flexible packaging and consolidating industrial opportunities, particularly in emerging markets will drive growth.

Sonoco will also benefit from elevated demand in automotive business, continued strong performance of the consumer business and rebound in the ThermoSafe side. ThermoSafe provides temperature-assured packaging. The company expects the business to pickup in 2018.

Share Price Performance

Over the past year, Sonoco has underperformed the industry it belongs to, partly due to decline in consumer packaging volumes stemming from change in consumer preference for more fresh and natural products compared to packaged food. Sonoco‘s shares have slipped 6%, while the industry recorded growth of 9%.



Zacks Rank & Stocks to Consider

Sonoco carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same sector are AptarGroup, Inc. (ATR - Free Report) , Deere & Company (DE - Free Report) and Dover Corporation (DOV - Free Report) . All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

AptarGroup has an expected long-term earnings growth rate of 8.5%. The company’s shares have moved up 20.5% in the past year.

Deere has an expected long-term earnings growth rate of 5.7%. The stock has gained 33% in a year’s time.

Dover has a long-term earnings growth rate of 13%. The company’s shares have rallied 33% during the same time frame.

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