Sonoco Products Co. saw earnings jump on higher overall sales during the first quarter, including stronger results in the company's consumer packaging business, which includes a variety of plastic offerings.
The Hartsville, S.C.-based packaging company earned $87.9 million, or 86 cents per share, on sales of $1.203 billion for the first quarter. That compares with earnings of $52.3 million, or 50 cents per share, on sales of $1.186 billion in last year's first quarter.
"Operating profits from our Consumer Packaging segment increased 12 percent over the prior-year quarter due to improved results in global composite cans, global plastics and flexible packaging. Overall, the segment benefited from a positive price/cost relationship, acquisitions and productivity improvements,” CEO Jack Sanders said in a statement.
Higher labor, maintenance and other operating costs as well as increased pension expenses and foreign currency exchange rates partially offset those gains.
Sonoco's consumer packaging business includes rigid containers and trays, both plastic and composite, blow molded plastic bottles and jars, and extruded and injection molded plastic products, the company said. The segment also includes printed flexible packaging and peelable membrane ends and closures.
Sonoco also unveiled plans to increase production capabilities and research and development in consumer packaging.
That includes the $20 million purchase of a laminator and rotogravure printing press. The laminator in Franklin, Ohio, will produce “high-quality laminates with minimum material waste, across a wide range of flexible substrates with varying thicknesses and a variety of adhesive systems. The investment supports Sonoco's growth in the hot-fill pouch market and sophisticated lamination structures.” The new press is going to a site in Waco, Texas.
Sonoco also is spending $11.9 million on a new Innovative Packaging Solutions research and development studio in Hartsville. The center will include rapid prototyping labs and allow for live observation of consumers interacting with products and packaging.
Sonoco, which also said it is increasing its dividend by 9.4 percent to 35 cents per share, told the market the company expects 2015 earnings to be in the range of $2.60 to $2.70 per share.