Jefferson Smurfit - whose shares have fallen heavily in recent weeks as money has flooded into new economy technology stocks - got a boost yesterday when it managed to beat analysts' forecasts for its 1999 results. Smurfit's results were expected to be poor, as last year was the bottom of the packaging industry cycle, but profit and earnings were comfortably ahead of market predictions.

However, current disinterest in industrial stocks on the Irish market meant that the reaction to the better-than-expected results was negligible with Smurfit shares up just five cents to €2.35 (£1.85) and well off the €3.35 high of mid-January. Smurfit Stone - 29 per cent-owned by Smurfit - fared better, however, and with the help of an upgrade by Merrill Lynch the shares closed up $1 on $13.56 1/4.

Smurfit's sales last year were virtually unchanged on €3.7 billion but pre-tax profits fell 20 per cent to €167 million with earnings per share down 40 per cent to 7.7 cents. Profits on the sale of non-core assets by Smurfit and Smurfit Stone meant that bottom-line profits were up 21 per cent on €263 million.

With capital expenditure down 22 per cent, asset disposals yielding €84 million and a three-year cost-cutting programme producing savings of €125 million, the debt/equity ratio fell from 52 per cent to 49 per cent while interest charges were covered 2.4 times by operating profits.

The weak performance in Europe is emphasised by the fact that while Europe accounted for more than 72 per cent of the €3.7 billion sales, it provided less than 41 per cent of the €448 million operating profits. In stark contrast, the US and Canada accounted for 11.4 per cent of sales but almost 45 per cent of operating profits as price increases took effect.

But this year should see continued improvement in Europe - prices are up almost 50 per cent on last year's thoroughly depressed level, while the indications are the latest $50 a ton increase in the US industry, and a pro-rata increase in Europe, will be implemented successfully.