Pactiv posts lower profit in 2Q

LAKE FOREST, Ill.

Pactiv Corp. said Thursday that its second-quarter net income fell about 6 percent, but the maker of Hefty garbage bags and packaging material still beat Wall Street's expectations.

Pactiv said net income slipped to $75 million, or 56 cents a share, in the three months that ended June 30. That compares with net income of $80 million, or 60 cents a share, in the same period last year.

Revenue rose to $973 million from $901 million.

Analysts polled by Thomson Reuters expected it to report earning 55 cents a share on revenue of $1.01 billion.

The company narrowed its full-year profit outlook and estimated it will earn between 56 cents and 60 cents per share for the third quarter, citing increased advertising and promotion spending.

Management noted that raw material costs were significantly began to decline about halfway through the second quarter.

"Overall, we are entering the second half (of the year) with good momentum and expect to perform well with volume growth of 9 to 10 percent, approximately half of which is organic," said Richard Wambold, Pactiv's chairman and chief executive officer.

Pactiv projects 2010 sales will increase between 8 percent and 9 percent, based on volume growth and flat pricing, and its earnings will fall between $2.15 and $2.30 per share.

The revenue forecast is more conservative than in April because the overall market is recovering more slowly than expected, the company said, and it now sees smaller prices increases in the second half of this year.

It had previously estimated earnings to range from $2.10 to $2.30 a share.

Analysts expect profit of $2.28 a share.

Shares in Pactiv fell 29 cents to $31.25 in aftermarket trading on Thursday after adding 52 cents to $31.54 during the regular session.