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Silgan 2Q Net Income Plunges 79 Pct On Weak Demand

STAMFORD, Conn. (AP) â¿¿ Silgan Holdings Inc., a packaging-products supplier, said Wednesday its second-quarter net income fell 79 percent, as metal food container demand was weak and European demand slackened.

Net income missed expectations and shares slid nearly 6 percent in morning trading.

Silgan makes metal and plastic containers and closures for North American and European food, beverage and consumer products.

The second quarter was "a bit more challenging than expected," said CEO Tony Allott. "We were disappointed with our metal food container volumes thus far, as the vegetable pack got off to a slow start."

The timing of shipments and weaker demand in Europe hurt results as well, he added.

Net income for the April-to-June quarter fell to $10.6 million, or 15 cents per share, from $51.2 million, or 73 cents per share, in the 2011 second quarter. Excluding one-time items, net income totaled 55 cents per share.

Analysts, on average, expected net income of 58 cents per share, according to FactSet.

Revenue was nearly flat at $821.6 million, from $822.2 million, last year. Analysts expected $822 million.

Despite the lackluster quarter, the company said that its plastic container business is showing signs of improvement and confirmed full year guidance for adjusted net income of $2.80 to $2.90 per share. Analysts, on average, were predicting net income of $2.89 per share, with estimates ranging from $2.80 to $2.95.

Silgan Holdings shares fell $2.62, or 6.1 percent, to $40.56 in morning trading, recovering slightly from an earlier drop of 7.2 percent. The stock ended Tuesday up nearly 12 percent since the beginning of the year.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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