DOW JONES NEWSWIRES Smurfit-Stone Container Corp. (SSCC) said it expects its adjusted fourth-quarter earnings to be significantly lower than the third quarter as North American packaging demand has fallen and containerboard and pulp-export markets have weakened even more dramatically.
The paper and forest product industry has been hurt by deteriorating demand for paper, a sluggish housing market and high costs. Goldman Sachs warned last week that aggressive production cutbacks in the sector won't be enough to match weaker-than-expected demand.
The maker of paper-based shipping products said again Thursday that it has been required to take significant downtime at its mills to balance supply with demand in the tough market.
The company expects to reduce containerboard and kraft paper production by up to 255,000 tons and softwood pulp production by up to 35,000 tons in the fourth quarter.
Those cuts follow the closure of Smurfit-Stone's hardwood pulp mill in Quebec in October and its corrugated medium machine in Arizona as the company looks to shed noncore operations.
During the third quarter, it closed four higher cost box plants and announced four additional closures, reducing its headcount by 229 positions. The company swung to a profit for the period as higher selling prices and greater volume offset incremental cost inflation.
Last week, Goldman Sachs cut its estimates on Smurfit-Stone, along with competitors International Paper Co. (IP) and Packaging Corp. of America (PKG), for the second time in a month.
The company's shares rose 2.9% to 32 cents in after-hours trading and are off 97% this year.
-By Lauren Pollock, Dow Jones Newswires; 201-938-5964; lauren.pollock@dowjones.com
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Publié le 18 Décembre 2008 Copyright © 2008 Dowjones