Crown Cork To Lay Off 2,700
Shares of packaging maker Crown Cork & Seal unraveled Tuesday after it said it will cut its workforce 7 percent and take a $121 million charge amid an unexpected decline in third-quarter profits.
The stock stumbled 4 9/16, or 12 percent, to 32 3/4 in recent trading, and it's well below its 52-week high of 55 3/16.
Crown Cork (CCK), the world's biggest producer of bottle caps and containers for food and drinks, said it sees third-quarter earnings of 80 cents to 82 cents a share, below 90 cents in the year-ago quarter and the $1.06 consensus estimate of analysts surveyed by First Call.For the full year, Crown Cork said it will earn $2.30 to $2.40 a share from continuing operations. Analysts have been expecting fiscal 1998 net of $2.70 a share.
Crown Cork blamed several factors for its poor results, including "generally weak food pack on the West Coast of the U.S.," and disruptions in "normal trading patterns and foreign currency weakness in Mexico, Canada and Brazil."
To boost results, the company said it will trim its workforce by 2,700 and streamline operations, resulting in the aforementioned charge. The moves are expected to save Crown Cork $64 million annually.
In addition, the company will reduce capital expenditures by $300 million a year in 1999 and 2000, buy back up to 10 million preferred and common shares and reduce its debt, which stood at $5.74 billion as of June 30.
Crown Cork has annual sales of $8.5 billion, with 247 manufacturing plants in 49 countries.
Company executives, weren't immediately available for comment.
Written By Jeffry Bartash