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Sealed Air Hits Targets

The company pays out a 15-cent initial dividend.
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Sealed Air (SEE) - Get Sealed Air Corporation Report matched fourth-quarter estimates, offered in-line 2006 guidance and paid out a 15-cent quarterly dividend for the first time.

The Saddle Brook, N.J., bubble-wrap giant made $73 million, or 77 cents a share, up from the year-ago $30 million, or 33 cents a share. The year-ago quarter was weighed down by 45 cents a share in debt repurchase and restructuring charges. Sales rose 6% from a year ago to $1.1 billion. Analysts were looking for a 74-cent profit on sales of $1.1 billion.

"We are pleased to announce that Sealed Air achieved record sales in the fourth quarter and full year as our sales surpassed the $4 billion milestone," said CEO William Hickey. "Our solid sales growth throughout the first three quarters of the year continued in the fourth quarter with strength in both our food packaging segment and our protective packaging segment. As expected, the fourth quarter was challenging from a raw material cost perspective. However, we continued to mitigate the impact of raw material costs by maintaining tight control on operating expenses and by implementing additional price increases where appropriate. Despite this difficult cost environment, our cash flow has remained strong. We repurchased $41 million of our common stock in the fourth quarter, bringing our full year repurchases to $116 million."

The company said it would begin its manufacturing realignment program this year, aiming to "improve our operating efficiencies, lower our overall cost structure and implement new technologies more effectively."

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Sealed Air said it expects its full-year 2006 diluted earnings per common share to be in the range of $2.90 to $3.10, against a Wall Street estimate of $3.08. "This guidance assumes a gradual easing of petrochemical-based raw material costs throughout the year, a full-year tax rate of 33.3% and steady growth in the global economy," Sealed Air said. "This guidance does not consider the potential impact of costs related to the implementation of the Company's global manufacturing strategy mentioned earlier."