U.S. packaging company Bemis Co.'s third-quarter earnings slipped 9 percent from the prior-year period as customers who use the company's packaging products faced lower sales volumes and tightened their purse strings.
The Neenah, Wisconsin-based company posted net earnings of $55.9 million versus $61.4 million a year ago, the company announced in its earnings statement Wednesday.
Sales climbed 4.9 percent to $1.36 billion on gains in currency translation and higher pricing that helped offset lower unit sales volumes.
Most of our customers experienced lower unit sales volumes in many of the product categories for which we provide packaging, and we expect this trend to continue through the fourth quarter, said Henry Theisen, company president and CEO.
Bemis has responded to lower volume levels by cutting its workforce. It also plans to close several of its plants around the world and focus on its most efficient sites and technologies over the next year, according to Theisen.
Within its markets, Bemis' flexible packaging business saw sales of $1.2 billion, up 5.5 percent from the previous year's quarter. The segment, however, saw the impact of food price inflation on its food producing customers, which translated into lower unit volumes for its operations in Europe and the Americas. For South America, currency fluctuations also led to higher raw material costs that weighed down on operating results.
For the company's pressure sensitive materials business, net sales totaled $141.8 million, relatively unchanged from a year ago. The segment saw gains from currency effects and higher selling prices, which helped offset lower unit volumes.
Bemis supplies flexible plastic packaging and pressure sensitive materials to companies that include the food, consumer products and healthcare sectors. The company has a workforce of about 20,000 people at 81 facilities in 12 countries, according to the company website.
The company's shares fell $3.34, or 10.6 percent, to $28.16 in afternoon trading, reaching the lower end of the 52-week range of $27.35 to $34.40.