Corrugated and consumer packaging bring mixed fortunes for RockTenn
Net sales of $2.33bn for the second quarter of fiscal 2013 increased $42m compared to the second quarter of fiscal 2012.
Total segment income of $174m increased 6% over the prior year quarter adjusted to eliminate $7m of pre-tax losses in Q2 2012 due to the closure of the Matane, Quebec containerboard mill.
Volume increase for corrugated
Corrugated Packaging segment net sales increased $103m to $1.6bn and segment income adjusted to eliminate $7m of pre-tax losses at the closed Matane, Quebec containerboard mill, increased $32m to $108m in Q2 2013 compared to the prior year quarter.
The increased sales and earnings are related to higher selling prices and containerboard volume, partially offset by higher operating expenses including $12m of incremental maintenance outage expense.
Corrugated Packaging segment tons shipped increased 28,000 tons over the prior year quarter due to increased domestic sales.
Pricing and display sales affect consumer segment
Consumer Packaging segment net sales decreased $21m and segment income declined $21m in the second quarter of fiscal 2013 compared to the prior year quarter due primarily to generally lower selling prices and display sales.
Sales were also affected by lower bleached paperboard volume due to the planned major maintenance outage at the Demopolis. Alabama bleached paperboard mill which resulted in a decrease of 10,000 tons of paperboard and pulp shipments year-on-year.
Lower volume for recycling
Recycling segment net sales decreased $25m over the prior year second quarter to $271m primarily as a result of lower volume.
Segment income decreased $1m to $4m in Q2 of fiscal 2013 compared to the prior year quarter.
RockTenn’s restructuring and other costs and operating losses and transition costs due to plant closures were primarily $8m of pre-tax facility closure charges and $4m of pre-tax integration costs.
James A. Rubright said, RockTenn chairman and CEO, said: “RockTenn’s strong earnings growth over the prior year quarter reflects continued improvements in our operating performance and higher containerboard and box pricing.
“Our supply chain performed well managing constrained containerboard supply during the first half of our spring outage season and our box plants performance improved as we have consolidated our system and grown our sales and unit pricing in a relatively flat domestic market.”
