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Sonoco Offers Pallet Shippers

by Zacks Equity Research

September 27, 2012 | Comments : 0 Recommended this article: (0)
SON

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ThermoSafe Brands, a business unit of Sonoco Products Co. (SON - Analyst Report), has introduced a series of temperature-assured, polyurethane-insulated pallet shippers for the U.S. and European markets. The pallet shippers will be used in distributing pharmaceuticals and other biotechnology products.

ThermoSafe Brands provides temperature assurance solutions for the pharmaceutical, biotech, medical, food service, food processing and gift food industries. The ThermoSafe SPS Series Pallet Shippers provide off-the-shelf convenience and easy assembly that meet the requirements of high-value life science products.

The newly introduced pallet shippers use Sonoco's patented SonoPost components. These components, first of its kind, provide structural stability and air flow for top and bottom refrigerants.

Moreover, the pallet shippers have fewer packaging components having self-supporting panels and can be assembled quickly. The pallet shippers are perfect for third-party logistics and shipments in bulk of biologic products.

Earlier, in January, Sonoco hiked the prices of products of ThermoSafe Brands by 4%–7%. The price hike encompassed the products of expanded polystyrene (EPS) and polyurethane (PUR) as well as custom and catalogued shipper solutions and components traded globally.

The price rise was necessitated chiefly by soaring cost of raw materials, labor, energy and transportation. The company failing to offset cost escalations with Lean initiatives was compelled to mark up its products.

Sonoco has recently been facing operational challenges at its North American uncoated recycled paperboard mills. This has resulted in unscheduled downtime and higher costs.

Besides, lower-than-expected volumes in the consumer and industrial packaging businesses are headwinds for the company. As a result, it has trimmed its earnings per share estimates for third-quarter 2012 to a range of 51 cents to 53 cents from the previous guidance of 62 cents to 66 cents.

Sonoco retains a short-term Zacks #4 Rank (Sell). We have a long-term Neutral recommendation on the stock.

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