Sonoco Lowers Base Earnings Guidance for Third Quarter and Full Year 2007



    HARTSVILLE, S.C., September 18 /CNW/ - Sonoco (NYSE:   SON), one of the
largest diversified global packaging companies, today announced that it
expects third quarter 2007 base earnings to be in the range of $.55 to $.58
per diluted share. The Company had previously provided on July 20, 2007 base
earnings guidance for the third quarter of 2007 of $.62 to $.65 per diluted
share. Base earnings is a non-GAAP financial measure that excludes
restructuring, asset impairment and environmental charges, and certain other
non-recurring or infrequent and unusual items. Additional information about
base earnings and base earnings per share is provided later in this news
release.

    According to Harris E. DeLoach, Jr., chairman, president and chief
executive officer, "Preliminary results through August 2007 reflect a greater
than expected decline in volumes across most of our served markets as a result
of weaker market conditions. In addition, raw material and other costs
exceeded our projections including higher prices for old corrugated containers
(OCC), our most significant raw material."

    As a result, Sonoco now expects base earnings for the full 2007 year to
be in the range of $2.23 to $2.26 per diluted share. The Company had
previously reported in July that it expected full-year base earnings to be in
the range of $2.36 to $2.40 per diluted share. For 2006, Sonoco reported
annual base earnings of $2.13 per diluted share and GAAP earnings per diluted
share of $1.92. The Company's new guidance reflects lower than previously
projected Companywide volumes and higher raw material and other costs for the
remainder of the year. In addition, the revised guidance for both the third
quarter and full year reflect a $.03 per share benefit from the release of
certain income tax reserves not included in the previous guidance.

    "We are cautious about the remainder of 2007 due to what appears to be a
slowing of general economic activity, primarily in North America. We have been
taking actions to reduce costs to offset some of the near-term shortfall,"
said DeLoach. "Sonoco will continue making investments that profitably grow
our businesses while providing value to our customers with new packaging and
services innovations. We remain on solid footing with healthy cash flow and a
strong balance sheet and will continue working to strengthen operating margins
by driving productivity improvements, further reducing our cost structure and
improving underperforming operations."

    About Sonoco

    Founded in 1899, Sonoco is a $3.7 billion global manufacturer of
industrial and consumer products and provider of packaging services, with more
than 325 operations in 35 countries, serving customers in some 85 nations. For
more information on the Company, visit our Web site at http://www.sonoco.com/.

    Definition of Non-GAAP Financial Measures

    The Company's results determined in accordance with U.S. generally
accepted accounting principles (GAAP) are referred to as "as reported"
results. Some of the information presented in this news release reflects the
Company's "as reported" results adjusted to exclude certain amounts related to
the Company's restructuring, asset impairment and environmental charges, and
certain non-recurring or infrequent and unusual items. These adjustments
result in the non-GAAP financial measures referred to in this news release as
"Base Earnings" and "Base Earnings per Diluted Share."

    These non-GAAP measures are not in accordance with, or an alternative
for, generally accepted accounting principles and may be different from
non-GAAP measures used by other companies. In addition, these non-GAAP
measures are not based on any comprehensive set of accounting rules or
principles. Sonoco continues to provide all information required by GAAP, but
it believes that evaluating its ongoing operating results may not be as useful
if an investor or other user is limited to reviewing only GAAP financial
measures. Accordingly, Sonoco uses these non-GAAP financial measures for
internal planning and forecasting purposes, to evaluate its ongoing operations
and to evaluate the ultimate performance of each business unit against budget
all the way up through the evaluation of the Chief Executive Officer's
performance by the Board of Directors. In addition, these same non-GAAP
measures are used in determining incentive compensation for the entire
management team and in providing earnings guidance to the investing community.

    Sonoco management does not, nor does it suggest that investors should,
consider these non-GAAP financial measures in isolation from, or as a
substitute for, financial information prepared in accordance with GAAP. Sonoco
presents these non-GAAP financial measures to provide users information to
evaluate Sonoco's operating results in a manner similar to how management
evaluates business performance. Material limitations associated with the use
of such measures are that they do not reflect all period costs included in
operating expenses and may not reflect financial results that are comparable
to financial results of other companies that present similar costs
differently. Furthermore, the calculations of these non-GAAP measures are
based on subjective determinations of management regarding the nature and
classification of events and circumstances that the investor may find material
and view differently. To compensate for these limitations, management believes
that it is useful in understanding and analyzing the results of the business
to review both GAAP information that includes the impact of restructuring
charges and certain unusual items, and the non-GAAP measures that exclude
them. Whenever Sonoco provides a non-GAAP financial measure related to its
reported results, it provides a reconciliation of the non-GAAP financial
measure to the most closely applicable GAAP financial measure. Investors are
encouraged to review the related GAAP financial measures and the
reconciliation of these non-GAAP financial measures to their most directly
comparable GAAP financial measures.

    Forward-looking Statements

    Statements included herein that are not historical in nature, are
intended to be, and are hereby identified as "forward-looking statements" for
purposes of the safe harbor provided by Section 21E of the Securities and
Exchange Act of 1934, as amended. The words "estimate," "project," "intend,"
"expect," "believe," "consider," "plan," "anticipate," "objective," "goal,"
"guidance" and similar expressions identify forward-looking statements.
Forward-looking statements include, but are not limited to, statements
regarding offsetting high raw material costs, improved productivity and cost
containment, adequacy of income tax provisions, refinancing of debt, adequacy
of cash flows, anticipated amounts and uses of cash flows, effects of
acquisitions and dispositions, adequacy of provisions for environmental
liabilities, financial strategies and the results expected from them,
continued payments of dividends, stock repurchases and producing improvements
in earnings.

    These forward-looking statements are based on current expectations,
estimates and projections about our industry, management's beliefs and
assumptions made by management. Such information includes, without limitation,
discussions as to guidance and other estimates, expectations, beliefs, plans,
strategies and objectives concerning our future financial and operating
performance. These statements are not guarantees of future performance and are
subject to risks, uncertainties and assumptions that are difficult to predict.

    Therefore, actual results may differ materially from those expressed or
forecasted in such forward-looking statements. The risks and uncertainties
include, without limitation:

    --  Availability and pricing of raw materials;

    --  Success of new product development and introduction;

    --  Ability to maintain or increase productivity levels and contain or
reduce costs;

    --  International, national and local economic and market conditions;

    --  Fluctuations of obligations and earnings of pension and
postretirement benefit plans;

    --  Ability to maintain market share;

    --  Pricing pressures and demand for products;

    --  Continued strength of our paperboard-based tubes and cores and
composite can operations;

    --  Anticipated results of restructuring activities;

    --  Resolution of income tax contingencies;

    --  Ability to successfully integrate newly acquired businesses into the
Company's operations;

    --  Currency stability and the rate of growth in foreign markets;

    --  Use of financial instruments to hedge foreign currency, interest rate
and commodity price risk;

    --  Liability for and anticipated costs of environmental remediation;

    --  Actions of government agencies and changes in laws and regulations
affecting the Company;

    --  Loss of consumer confidence; and

    --  Economic disruptions resulting from terrorist activities.

    The Company undertakes no obligation to publicly update or revise
forward-looking statements, whether as a result of new information, future
events or otherwise.

    Additional information concerning some of the factors that could cause
materially different results is included in the Company's reports on forms
10-K, 10-Q and 8-K filed with the Securities and Exchange Commission. Such
reports are available from the Securities and Exchange Commission's public
reference facilities and its Web site, http://www.sec.gov/, the Company's
investor relations department and the Company's Web site,
http://www.sonoco.com.




For further information:

For further information: Sonoco Roger Schrum, 843-339-6018
roger.schrum@sonoco.com

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