This is a securities class action lawsuit against Sonoco Products and certain of its officers and directors charging violations of the Securities Exchange Act of 1934.
Sonoco Products manufactures industrial and consumer packaging products, and packaging services primarily in the United States, Europe, and Canada.
The class action complaint alleges that, during the Class Period, Sonoco Products issued a series of materially false and misleading statements concerning Sonoco Products' financial performance and prospects. Specifically, the complaint alleges that these statements were materially false and misleading because Sonoco Products failed to disclose and/or misrepresented:
(i) that Sonoco Products was losing market share to its competitors;
(ii) that Sonoco Products was having operational difficulties in implementing its next generation of products;
(iii) that Sonoco Products was experiencing weaker sales in its Engineered Carriers and Paper and Consumer Packaging segments, especially in North America;
(iv) that Sonoco Products was distracted by the loss of a bid on a large contract, which resulted in decreased sales and price concessions on current contracts;
(v) that Sonoco Products was having a difficult time in moving its old inventory; and
(vi) that as a result of the forgoing, Sonoco Products had no reasonable basis for its 2007 earnings guidance.
On July 20, 2007, Sonoco Products announced its financial results for the second quarter of 2007, the period ended July 1, 2007. For the quarter, Sonoco Products reported earnings of $0.41 per diluted share, below analysts' expectations. In response to this announcement, shares of Sonoco Products' common stock fell $6.30 per share, or over 14%, to close at $38.00 per share, on heavy trading volume. On September 18, 2007, Sonoco Products announced that it was reducing its third quarter 2007 base earnings estimate to a range of $0.55 to $0.58 per diluted share. Upon this news, shares of Sonoco Products' stock fell $2.42 per share, or over 7%, to close at $30.78 per share, on heavy trading volume.
Name (Stock Symbol)
Sonoco Products Company (SON)
Sonoco Products Company provides industrial and consumer packaging products, and packaging services primarily in the United States, Europe, and Canada
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