Sonoco Products shares fall after cutting guidance

NEW YORK - Shares of Sonoco Products Co. fell Friday after the packaging maker cut its earnings forecasts and warned that pension expenses could weigh on next year's profits.

The Hartsville, S.C.-based company, citing "significantly slowing global economic conditions," said it now expects "base" earnings per share for the fourth quarter of this year to be 48 cents to 52 cents, down from its earlier forecast for 60 cents to 64 cents.

The company defines base earnings as a "non-GAAP financial measure" that excludes restructuring charges, asset impairment charges and other non-recurring and unusual items.

Analysts polled by Thomson Reuters expect, on average, earnings per share for the fourth quarter of 60 cents. Those estimates typically exclude one-time items.

For all of 2008, Sonoco expects to earn $2.23 to $2.27 per share, down from its earlier forecast for $2.36 to $2.40. Analysts expect $2.36 per share.

For 2009, Sonoco forecast earnings per share of $2.25 to $2.35. Analysts expect $2.43 for next year.

Mid-November asset values and interest rates indicate Sonoco's U.S. pension plan was under-funded by about $138 million, the company said.

"The current decline in asset values would significantly increase future years' pension expense," a spokesman said.

Sonoco estimates a year-over-year increase in 2009 pension expense of about $48 million, or 30 cents per share after taxes, based on asset values and interest rates at mid-November.

Shares fell $2.07, or 8.6 percent, to $22.40 in afternoon trading after falling to a 52-week low of $19.84 earlier in the session.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.