Sonoco’s net sales for the 1Q 2017 were $1.17 billion, down $54 million, or 4.4%, from last year’s quarter, as the company said in the press release received by Lesprom Network.
Gross profits were $220.2 million in the 1Q, down $25.1 million, compared with $245.3 million in the same period in 2016.
Gross profit as a percent of sales declined to 18.8%, compared with 20% in the same period in 2016.
The gross profit percentage reduction in the quarter was due primarily to an unfavorable price/cost relationship, most notably in Industrial Segment.
Commenting on the Company’s 1Q results, Sonoco President and CEO Jack Sanders said, “Despite an unprecedented and unexpected sharp increase in recovered paper prices, which is the primary raw material used in our Paper and Industrial Converted Products segment, Sonoco was still able to achieve the midpoint of our 1Q guidance. Overall, compared to the prior-year quarter, the Company's earnings were negatively impacted by lower volume/mix; divestitures, net of acquisitions; a negative price/cost relationship; and higher labor, maintenance, pension and other operating expenses. Partially offsetting the quarter's headwinds were procurement savings, fixed-cost productivity, lower management incentive expense, and a lower effective tax rate.”
Sonoco is a global provider of a variety of consumer packaging, industrial products, protective packaging, and displays and packaging supply chain services.