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Sonoco (SON) Announces Hike in Prices for URB Products

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Consumer packaging company, Sonoco Products Company (SON - Free Report) has announced a price hike by $60 per ton for all grades of uncoated recycled paperboard (URB) products. The price increase will be effective on shipments in the U.S. and Canada, beginning Feb 6, 2017.
 
The price rise has been mainly driven by higher recycled fiber and other costs. This move will assist Sonoco to continue providing high-quality, value-adding products to customers. In Oct 2016, Sonoco declared rise in the price of all grades of URB products, by $40 to $60 per ton, depending on grade.

An increase in costs can adversely affect Sonoco’s business and financial results, while the ability to pass them on to customers, by raising prices, will improve productivity. The company also uses derivatives to mitigate some of the effect of raw material and energy cost fluctuations.

Sonoco is constantly seeking the most cost-effective methods and structure to serve its customers. Thus, the company normally hikes prices to counter the rising raw material costs. It will continue to monitor market conditions, in order to determine if additional pricing actions will be required.

Moreover, Sonoco has outperformed the Zacks categorized Containers-Paper/Plastic industry in the past one year. The stock gained 43.7%, more than the industry’s gain of 27.7%, over the same time frame.

 


 

Zacks Rank & Key Picks

Sonoco currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the same sector include Altra Industrial Motion Corp. , Apogee Enterprises, Inc. (APOG - Free Report) and Actuant Corporation .

Altra Industrial Motion sports a Zacks Rank #1 (Strong Buy) and has an impressive track record of earnings surprise with an average positive earnings surprise of 8.06% for the last four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

Apogee Enterprises also boasts a Zacks Rank #1 and has an average earnings surprise of 13.24% for the trailing four quarters. Actuant Corporation, another Zacks Rank #1 stock, has an average positive earnings surprise of 11.47% for the past four quarters.

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