Jul 19, 2012. /Lesprom Network/. Sonoco reported financial results for its 2Q 2012, ending July 1, 2012. Net sales for the 2Q were $1.20 billion, compared with $1.13 billion in the same period in 2011, as the company said in the press release received by Lesprom Network. This 7% increase was due to sales from acquisitions of $124 million, almost all of which is related to Tegrant, and higher selling prices, partially offset by lower volume/mix and a $41 million negative impact from foreign currency translation. Gross profits were $217 million in the 2Q 2012, compared with $191 million in the same period in 2011. Gross profit as a percent of sales was 18%, compared with 16.9% in the same period in 2011. The improvement in gross profits was due to productivity improvements and a positive price/cost relationship, partially offset by lower volumes, a negative shift in the mix of business and higher labor and other costs. The Company's selling, general and administrative (SG&A) expenses increased 19% year over year in the quarter, primarily due to added costs from the acquired Tegrant businesses. SG&A expenses were 9.9% of net sales in the 2012 period, compared with 8.8% in 2011. GAAP net income attributable to Sonoco in the 2Q was $51.3 million, or $.50 per diluted share, compared with $53.4 million, or $.52 per diluted share, in 2011. Base earnings were $59.7 million, or $.58 per diluted share, in the second quarter, compared with $60.8 million, or $.60 per diluted share, in 2011. Items excluded from base earnings in the 2Q 2012 totaled $8.3 million, after tax, or $.08 per diluted share. Commenting on the Company's 2Q results, Chairman and CEO Harris E. DeLoach Jr. said, "Sonoco's 2Q results met our expectations despite the continuing tough global economic conditions. Base earnings showed sequential improvement for the second consecutive quarter and gross profits increased 13% year over year while base earnings before interest and taxes (EBIT) improved by 6%. Base earnings were down year over year by a little less than 2%. The benefits to base earnings from significantly improved productivity, prior year acquisitions and a positive price/cost relationship were largely offset by lower volumes, a negative mix of business and higher pension, interest and income tax expenses. However, absent the impact of a stronger dollar, year-over-year base earnings would have been essentially unchanged. "Our Consumer Packaging segment's 2Q operating profit improved 6% year over year, but was down 15% from the 1Q largely due to normal seasonality. The segment's year-over-year improvement was a result of productivity gains and a positive price/cost relationship, partially offset by lower volumes, negative mix and higher pension, labor and other expenses. Operating profits from our Packaging Services segment declined 54% from the 2Q 2011, and 17% from the 1Q. Year-over-year results were negatively impacted by the previously announced loss of a large contract packaging customer and a stronger dollar. "In our Paper and Industrial Converted Products segment, 2Q operating profits were down 2% from last year's 2Q, but were up 23% from the 1Q. The year-over-year decline was driven by higher pension, labor and other expenses and a negative impact from exchange rates. These factors were partially offset by improved productivity, a positive price/cost relationship and slightly better volume, coming primarily from improved paper operations. "Operating profits in our new Protective Packaging segment, created as a result of last year's acquisition of Tegrant Holding Corporation, improved 66% from the 1Q. Tegrant's operations comprise the majority of this segment and we are very pleased with the improvement we're seeing there in operating efficiencies and the progress being made in the integration. Year-over-year results in the legacy protective packaging operation improved slightly as a small decline in volume was more than offset by improved productivity." For the first six months of 2012, net sales increased 8% to $2.41 billion, compared with $2.25 billion in the first half of 2011. Net income attributable to Sonoco for the first six months of 2012 was $94.4 million, or $.92 per diluted share, compared with $110.8 million, or $1.08 per diluted share, in the first half of 2011. Earnings in the first half of 2012 were negatively impacted by after-tax restructuring and other charges of $19.1 million, or $.19 per diluted share, compared with $8.5 million, or $.09 per diluted share, in the same period in 2011. Base earnings for the first half of 2012 were $113.5 million, compared with $119.3 million in the same period in 2011. This 5 percent year-over-year decline in base earnings stemmed from lower volume, a negative mix of business and higher pension, labor and other expenses. These negative factors were partially offset by productivity improvements, acquisitions and a positive price/cost relationship. Gross profit increased 12.5% year over year to $433.4 million, compared with $385.3 million in 2011. Gross profit as a percent of sales increased in the first half of 2012 to 17.9%, compared to 17.2% in 2011. For the first six months of 2012, cash generated from operations was $144.4 million, compared with $32.1 million in the same period in 2011. The first half cash flow reflects pension and postretirement benefit plan contributions of $58.9 million, compared with $110.5 million in the first half of 2011. Cash flow from operations also improved during the first half of 2012 due to less management incentives paid in comparison to last year. Capital expenditures and cash dividends were $102 million and $59.3 million, respectively, during the first half of the year, compared with $70.5 million and $57 million, respectively, for the same period in 2011. Sonoco expects 3Q 2012 base earnings to be in the range of $.62 to $.66 per diluted share. Base earnings in the third quarter of 2011 were $.66 per diluted share. For the full-year 2012, base earnings are projected to be in the range of $2.34 to $2.39 per diluted share. The Company had previously provided full-year guidance of $2.34 to $2.44 per diluted share. Sonoco is a global provider of a variety of consumer packaging, industrial products, protective packaging and packaging supply chain services.