Smurfit-Stone Container Corporation (Smurfit-Stone), a paper recycler and containerboard and corrugated packaging producer, expects sales of $1.53 billion for the fourth quarter of 2008. It also expects a net loss of $2,836 million, or $11.04 per diluted share for the fourth quarter of 2008.
$2.7 billion, or $10.73 per share, non-cash charges to write off goodwill and other intangible assets
The company will recognize in the fourth quarter of 2008 non-cash charges of $2,761 million, or $10.73 per diluted share, related to the impairment of goodwill and other intangible assets. These charges resulted from significant decline in value of its equity securities and debt instruments and downward pressure placed on earnings by the weakening U.S. economy. The goodwill consisted primarily of amounts recorded in connection with the company’s merger with Stone Container Corporation in November 1998. The company does not expect to incur any cash expenditures related to these impairment charges.
In addition to the impairment charges, the 2008 results include restructuring charges of $40 million, a loss of $12 million related to certain ineffective interest rate swap contracts and non-cash foreign currency gains of $17 million. For the fourth quarter of 2007, the company reported a net profit of $41 million, or $0.16 per diluted share, on total sales of $1.84 billion. The 2007 results included restructuring income of $29 million, non-cash foreign currency losses of $5 million and a $5 million income tax benefit due to a reduction in the Canadian statutory income tax rates.