Smurfit Stone rallies following sharp sell-off

Smurfit Stone Container rallied yesterday after a sharp sell-off following another profit warning from the company.

The cardboard box and paper bag manufacturer slumped nearly 12 per cent in after-hours trade on Friday after the company warned that it would lose between 22 and 25 US cents per share in its first quarter compared to forecasts of 10 cents.

The company blamed lower packaging prices and higher energy and employee costs for the losses.

Chairman and chief executive Mr Patrick Moore said the company's return to profitability was taking longer than expected but said demand for packaging was increasing "at a steady pace".

The company had recently announced plans to increase prices in the early months of 2004 with the benefits coming through in the second half.

Smurfit Stone, though listed and operating in north America, has a substantial number of small Irish shareholders as a result of the break-up of the Jefferson Smurfit group before it was taken private.

Smurfit Stone shares were trading at $16.43 on Nasdaq in afternoon trading, more than 6 per cent down on Friday's official close of $17.50 but recovering from the $15.46 they hit in the immediate aftermath of the profit warning.

(Additional reporting, Reuters)