Sealed Air Corporation (SEE) has yet again announced a 3–5% price hike on certain products of its Food Care unit in North America, effective Oct 6, 2014, in order to remain profitable in the wake of higher raw material and other input costs.
All major petrochemical suppliers increased prices for polyethylene and nylon on Sep 1, on top of significant increases announced earlier this year. Since Jan 2013, the polyethylene suppliers have increased prices between 13-22%, including a 4-8% hike in early 2014. Hence, Sealed Air’s price hike is deemed necessary.
This hike follows the company’s previous price increase announced in August, wherein it had announced a 5% price hike on certain products of its Product Care unit in North America, effective Oct 1, 2014.
The consumer packaging company reported a 20% year-over-year increase in second-quarter adjusted earnings per share to 42 cents. The company also raised its fiscal 2014 guidance based on strong performance in the first half as well as improved outlook for the second half.
Sealed Air stands to benefit from the relocation its global headquarters, which will create a stronger, one-company culture and enable greater collaboration, accelerate innovation and drive operating efficiencies. Moreover, the company will benefit from cost savings from its ongoing Integration & Optimization Program as well as its recent additional restructuring plan.
Elmwood Park, NJ-based Sealed Air is a major specialty packaging service provider to a diverse set of end markets. The company operates in the United States and in 50 other countries with packaging and performance-based materials and equipment systems serving food, medical, and an array of industrial and consumer applications.
Sealed Air currently sports a Zacks Rank #1 (Strong Buy). Other favorably ranked stocks in the same sector include Berry Plastics Group, Inc. (BERY), Graphic Packaging Holding Company (GPK) and Packaging Corporation of America (PKG). All these stocks carry a Zacks Rank #2 (Buy).
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