DENVER—A day after announcing two plant closures, Ball Corp. executives said Thursday they may make additional cuts in package manufacturing operations as part of a restructuring.
The company, which produces metal and plastic product packaging, made the announcement as it reported a drop in third-quarter net income because of a $51.8 million after-tax charge related to a lawsuit settlement.
The earnings were disappointing in both the food and household and plastics segments because it now will be difficult for either unit to exceed fiscal 2006 results, Chief Financial Officer Ray Seabrook said.
“We are not satisfied with the results in either the food and household or plastic segment and plan to take further actions which could include more capacity reduction,” Seabrook told analysts on a conference call. He provided no specifics about where additional cuts may occur.
Ball said Wednesday it will close two aerosol container manufacturing plants and sell a decorative tinplate can business in the United States, which will eliminate a little more than 500 jobs by 2009.
The company based in suburban Broomfield acquired all three plants last year as part of its purchase of U.S. Can Corp. The closures will result in a net reduction of 10 production lines and consolidated operations. Ball will take a $26 million charge in the fourth quarter related to the changes.
As part of the restructuring, the company plans to open a 24-ounce can production line at a Monticello, Ind., plant to help meet demand.
For the quarter ending Sept. 30, Ball reported net income of $60.9 million, or 59 cents a share, compared with $107.1 million, or $1.02 per share, in the third quarter of 2006. Revenue rose to $1.9 billion from $1.8 billion in the year-ago quarter.
The most recent quarter included the after-tax charge equal to 50 cents a share while the year-ago quarter included an after-tax gain of $1.7 million, or 2 cents a share, related to an insurance settlement from a fire at a plant in Germany.
In the first nine months, Ball reported net income of $248 million, or $2.40 a share, compared with net income of $281.3 million, or $2.68 a share, in the year-ago comparable period.
Revenue totaled $5.63 billion, up from $5.03 billion in the first nine months of 2006.
Ball’s stock dropped $2.40 a share to $50.65 in Thursday trading.
In addition to the packaging operation, Ball has an aerospace and technology division that primarily serves the federal government.
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