Q3 2011 Earnings Call
October 27, 2011 10:00 am ET
Robert W. Kuhn - Chief Financial Officer, Principal Accounting Officer, Executive Vice President and Secretary
Stephen J. Hagge - Chief Operating Officer, Executive Vice President, Director and Member of Executive Committee
Peter H. Pfeiffer - Chief Executive officer, President, Director and Member of Executive Committee
Ralph A. Poltermann - Former Executive Vice President and Treasurer
Christopher D. Manuel - Wells Fargo Securities, LLC, Research Division
James Armstrong - Vertical Research Partners Inc.
Thomas Mullarkey - Morningstar Inc., Research Division
Michael A. Hamilton - RBC Wealth Management, Inc., Research Division
Jason Rodgers - Great Lakes Review
Timothy Burns - Cranial Capital
Timothy P. Burns
Unknown Analyst -
Brian Rafn - Morgan Dempsey Capital
Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division
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Ladies and gentlemen thank you for standing by. Welcome to AptarGroup's Third Quarter 2011 Results Conference Call. [Operator Instructions] Introducing today's conference call is Ralph Poltermann, Executive Vice President and Treasurer for AptarGroup. Please go ahead, sir.
Ralph A. Poltermann
Thank you, Jonathan. Before I make my usual introduction, I want to be sure that you all are aware of a change taking place relating to our Investor Relations activities. I'm approaching my 30th anniversary with the company and I had decided to retire at the end of this year to start a new chapter of my life. So this call today will be my last one. Matt DellaMaria is taking over my Investor Relations responsibilities and worked very closely with Matt over the past couple of years and many of you have already had the opportunity to meet him. I'm confident that it will be a smooth transition for you. I've enjoyed and will certainly miss the engaging discussions we have had over the years and I wish all of you continued success in the future.
Turning to our discussion of the results, I would like to point out that the information that we'll be discussing in the call today includes some forward-looking comments and that the actual results or outcomes could differ materially from those projected or contained in the forward-looking statements. To review important factors that could cause actual results to differ materially from those projected or contained in the forward-looking statements, please refer to AptarGroup's SEC filings. The information of this conference call is relevant on the day of this live call, although the company will post the replay of this conference call on its website as a service to those investors who were not able to listen today, the information contained in the replay will be dated and should be used for background information only. The company undertakes no obligation to update material changes in forward-looking information contained therein. Participating on this call today are Peter Pfeiffer, President and Chief Executive Officer of the AptarGroup; Steve Hagge, Executive Vice President and Chief Operating Officer; and Bob Kuhn, Executive Vice President and Chief Financial Officer. I would now like to turn the conference call over to Peter.
Peter H. Pfeiffer
Thank you, Ralph. Good morning, everyone. I will begin now the discussion with the review of our consolidated results for the third quarter, our expansion in India and our outlook for the fourth quarter. Afterwards, I will briefly comment on the results of our Beauty & Home segment. Steve will follow me with his comments on the Pharma and Food & Beverage segments, and then Bob will review our financials in more detail.
Looking to at our quarterly performance, we are pleased to report record third-quarter results. All 3 segments continued strong core sales growth. Currency translation effects also contributed to our sales growth. We also achieved record third-quarter earnings per share, primarily on the strength of our Pharma segment. As you saw in our press release, we are expanding our presence in India, which is an important and growing market for us. The acquisitions allows us to better serve our Personal Care and Food + Beverage, and Personal Care and Food + Beverage customers. And the clean-room facility will enable us to provide locally produced delivery devices to our pharmaceutical customers.
Looking ahead, while we are pleased with our strong year-to-date performance, we are seeing some caution on the part of certain customers as we look ahead to the fourth quarter, primarily due to global economic uncertainties. We believe this is a temporary situation until there is a more stable economic outlook, particularly in U.S. and Europe. However, we are encouraged as we look ahead for 2012. We have a lot of project activities and our market-focused organization continues to discover many new market applications for our unique delivery solutions. Also with our strong balance sheet and broad geographic presence, we are well-positioned for any temporary slow down in any one particular region. Currently, earnings per share for the fourth quarter are projected to be in the range of $0.57 to $0.62 per share compared to the prior year fourth quarter record of $0.59 per share.
Turning now to the Beauty & Home segment. Compared to the prior year, reported sales for the third quarter increased 12%. Changes in exchange rates positively affected sales by 6% and tooling sales contributed another 2%. Excluding changes in exchange rates, sales in the personal care market increased 8%, sales to the fragrance/cosmetic market increased 5%, and sales to the household markets increased 15%. Overall, segment income declined approximately 7% due to product mix, certain underutilized capacity, primarily towards the end of the quarter, and higher professional proceeds.