Sonoco Products Company (SON Quick QuoteSON - Free Report) is implementing price hikes by $50 per ton for all grades of uncoated recycled paperboard (URB) sold in the United States and Canada. The price rise will be effective relating to the shipments starting Apr 26.

Sonoco is executing price-rise actions in response to solid demand across its United States and Canada URB mill network, which is driving significantly longer backlogs as well as rapidly-increasing input costs, especially freight, papermaking chemicals and packaging supplies. These are likely to negatively impact Sonoco’s Paper and Industrial Converted Products segment in first-quarter 2021.

Meanwhile, the company’s Consumer Packaging segment will continue to gain from robust demand for food packaging owing to the rise in at-home eating habits amid the pandemic. Demand in the Industrial Paper Packaging segment’s served markets is improving, and paperboard operations in North America are gaining from elevated demand for the tissue and towel markets. Its Protective Solutions segment is likely to witness higher demand in the pharmaceutical and appliance-served markets during the March-end quarter. The ThermoSafe packaging business is anticipated to gain from a strong flu vaccine season, and solid demand from its base pharmaceutical and food customers in the ongoing quarter.

Considering these factors, Sonoco projects adjusted earnings per share between $3.40 and $3.60 for 2021, indicating year-over-year growth of 3% at the mid-point. Management also projects sales-volume improvement across all segments.

The company is focused on driving growth and margin expansion and generating solid free cash flow. Sonoco and other Zacks Containers – Paper and Packaging stocks like Amcor Plc (AMCR Quick QuoteAMCR - Free Report) , AptarGroup, Inc. (ATR Quick QuoteATR - Free Report) and Greif Inc. (GEF Quick QuoteGEF - Free Report) are focused on optimizing businesses through productivity improvement, standardization and cost control.

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