Standard Commercial Gives Italy the Boot

Standard Commercial (STW Quote) will lay off 62 workers by next spring as it shuts down its tobacco processing operations in Italy.

The Wilson, N.C., tobacco leaf merchant said it expects to take a charge of $16 million to $20 million in its third quarter ending Sept. 30 to cover initial costs of the move. Standard Commercial said it could take further charges to complete the shutdown.

"In recent years the Italian leaf tobacco market conditions as well as the strengthening of the euro have had a significant adverse impact on our results in this market and our future projections indicate a continuation of this trend," said CEO Robert Harrison. "Additionally, the recently enacted reform of the Common Agricultural Policy within the European Union and its likely effect on future tobacco production and costs have added further impetus for us to take this decision.

But Harrison said the company's business is performing in line with expectations otherwise. "After giving effect to the treatment of the Italian operations closure as a discontinued operation, we expect our earnings per share on a diluted basis from continuing operations to be toward the upper end of our previously disclosed guidance of $1.95 to $2.05 per share," he said.

On Friday, Standard Commercial slipped 36 cents to $15.28.