AptarGroup's profit sinks
CRYSTAL LAKE – Packaging products maker AptarGroup's profits plunged in the third quarter largely due to unfavorable currency exchange rates.
Its third-quarter profit fell to $42.1 million, or 62 cents per share, from $49.3 million, or 72 cents per share, a year earlier, Reuters reported.
Officials at the Crystal Lake-based company said in a conference call Friday that five of AptarGroup's facilities lost power when Superstorm Sandy hit the East Coast this week. No employees were injured and no significant damage was reported at the facilities. Four of the five had power restored by Friday, AptarGroup President and CEO Stephen Hagge said.
Sales, hurt by exchange rates, declined 2 percent to $589.6 million in the third quarter.
"As we expected, it was a challenging quarter compared to the prior year, particularly in the beauty, food and consumer health care markets," Hagge said in a statement. "The U.S. dollar continued to be strong relative to numerous other currencies and this had a significant negative impact on our results."
The company forecast earnings of 53 cents to 58 cents per share in the fourth quarter, below the 62 cents per share earnings analysts were expecting, according to Reuters.
Aptar stock closed at $49.49 Friday, down 6.85 percent.
"We expect further challenges in the fourth quarter, including continued currency exchange rate headwinds, ongoing softness in certain markets driven by economic uncertainties, and decreased demand for our prescription nasal spray pumps," Hagge said.
Company officials announced a plan to consolidate operations in Europe. More efficient production will allow the company to close two of its 12 facilities in Eurpoe, affecting 170 employees. This is expected to save about $12 million a year starting in late 2013.
Hagge said he was encouraged by project talks with customers and he highlighted some of the new products released recently with AptarGroup devices. Among them were Procter & Gamble's new James Bond 007 fragrance and Bvlgari's Jasmin Noir perfume.
He emphasized "tremendous growth" in the company's beverage segment from products such as Kraft Food's water flavor enhancer MiO, Tropicana Pure Premium's 89-ounce container, and one of the top sports drinks in China.
Aptar is a leading provider of dispensing solutions. It has operations in 19 countries and more than 10,000 employees. Aptar's headquarters is in Crystal Lake and the company employs more than 450 people in McHenry County.