Sonoco cuts Q4 profit outlook on weak demand

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(Global Markets) - Packaging material maker Sonoco Products Co (SON.N) cut its earnings forecast for the fourth quarter, hurt by weakness in its North American and European tube and paper operations.

The company said it is implementing additional restructuring actions to cut costs and keep them in line with lower demand.

In the quarter, the company, which makes consumer and industrial packaging products, expects to record an after-tax charge of 10 cents a share from its previously announced and additional restructuring actions in the quarter.

Sonoco now expects fourth-quarter adjusted earnings of 45 cents to 47 cents a share, down from its prior forecast of 59 cents to 63 cents a share.

Earlier this week, peer MeadWestvaco Corp (MWV.N) warned of lower volumes and production in the fourth quarter.

Sonoco said demand dropped off in the last six weeks of the October-December period. The company took down its North American paperboard mill system for about 178 machine operating days during the quarter.

Tube and core volumes fell 7 percent in North America and in Europe, on a same-day basis, the company said in a statement.

Sonoco also narrowed its 2011 earnings forecast to $2.28 to $2.30 per share, from $2.41 to $2.46 per share.

The company plans to change the number of reporting segments to four from three, starting from the fourth quarter, following its $550 million acquisition of protective-packaging maker Tegrant Corp last year.

The company expects to announce the fourth-quarter results on February 9.

Shares of the Hartsville, South Carolina-based company were down 4 percent at $32.34 in early trading on the New York Stock Exchange. Earlier in the session, they touched a one-month low of $32.10.

(Reporting by Ritika Rai in Bangalore; Editing by Maju Samuel)