AptarGroup 2Q Net Down 35.9% On Weak Segment Sales

   DOW JONES NEWSWIRES 
 

AptarGroup Inc.'s (ATR) second-quarter profit dropped 35.9% as beauty and home segment sales continued to be buffeted by the economic downturn.

"While we are encouraged that late second quarter activity seems to indicate that things may be stabilizing in some of the hardest hit markets, visibility remains very low and uncertainty remains," said Chief Executive Peter Pfeiffer. "We also believe that the road out from the bottom of these markets will not be a rapid ascent, but rather a prolonged, gradual journey."

Aptar, which makes pump dispensers for perfumes, cosmetics and pharmaceuticals, as well as dispensing systems for food and drinks, has suffered from the drop in consumer spending amid the recession. It plans to consolidate plants and offices to reduce costs.

Aptar reported profit of $28.5 million, or 41 cents a share, down from $45.3 million, or 64 cents a share, a year earlier.

Revenue dropped 20.1%, to $440.5 million, with currency exchange rates hurting results by 9%.

In April, Aptar predicted earnings of 37 cents to 42 cents. Analysts' latest estimates were for per-share earnings of 40 cents on revenue of $455 million, according to a poll by Thomson Reuters.

Gross margin rose to 34.4% from 32.4%.

Beauty and home segment sales dropped 26% due to a slide in the fragrance and cosmetic market, which has been hampered by economic conditions, particularly in the developed markets. Closures declined 14.6%, driven by cost decreases in pass-through resin, and pharmaceuticals slid 12.4%, mostly due to changes in currency-exchange rates.

In April, the company said it expected difficult conditions to continue in the second quarter with improvement in the second half of this year.

Looking ahead, AptarGroup expects third-quarter earnings of 44 cents to 49 cents. Analysts estimated earnings of 49 cents a share on revenue of $489.4 million.

AptarGroup's shares were flat, at $35.74 in after-hours trading, from a 2.1% gain by the close of the regular session. The stock is up about 40% since March but is still down about a fifth in the past 10 months.

-By Adam O. Manzor and Kathy Shwiff, Dow Jones Newswires; 212-416-2357; [e-mail]