A month ahead of the shareholders' meetings which are expected to approve the controversial merger with Stone Container, Jefferson Smurfit Corporation has reported third-quarter results broadly in line with market forecasts. The Smurfit group owns 46 per cent of Jefferson Smurfit Corporation (JS Corp).

Profits in the third quarter were $8 million (£5.29 million) - unchanged from the third quarter of 1997 while sales of $841 million were marginally higher than the same period last year. Earnings per share for the quarter were 7 cents per share.

Results for the first nine months of the year were also in line with forecasts with net income of $17 million against the $3 million loss in the first nine months of 1997. That $17 million profit figure comes after a $13 million extraordinary charge for the early repayment of bank debt.

Analysts in Dublin expected the fall in earnings per share from the previous two quarters, reflecting a combination of lower liner-board and corrugated box prices and increased inventory-related downtime.

JS Corp president and chief executive Mr Dick Graham said that the third-quarter results were "a mix of positives and negatives."

"Average prices for several paperboard and packaging products were up significantly over year-ago levels. However, the benefit of price improvement was offset by the impact of market related downtime at the company's Jacksonville, Florida, liner-board mill," he said.

Costs for old corrugated containers were well below last year's levels as a result of downtime in the container board industry. Higher newsprint prices were offset by higher energy and fibre costs.

Mr Graham said that JS Corp would benefit in the fourth quarter from lower fibre costs and seasonal demand for a number of its products. "However, our results will be affected by additional downtime in our container board system throughout the quarter.

Meetings of JS Corp and Stone shareholders will be held on November 17th, and despite reservations among some private JS Corp shareholders, these meetings are expected to approve the merger.

The gap between the JS Corp and Stone share prices still indicates a view in the market that Stone benefits more from the merger than JS Corp while the real winner from the merger is the Morgan Stanley Leveraged Equity Fund while will sell 20 million JS Corp shares to the Smurfit group at $25 each considerably ahead of the market price.