Smurfit Stone Container - the US packaging company spun off from Jefferson Smurfit in 2002 - has returned to profit. The company said that strong demand and price increases offset the impact of higher costs in the third quarter.

The Chicago-based group reported profits of $28 million (€22 million) for the three months to the end of September. This compares with losses of $75 million in the equivalent quarter last year, when the group took a charge of $106 million in respect of litigation.

Sales were $2.165 billion compared to $1.94 billion last year. Earnings were 11 cent per share compared to losses of 30 cent per share last time.

Mr Patrick Moore, the chairman, president and chief executive of Smurfit Stone, said the return to profitability "reflected solid business fundamentals, including price recovery, high container board mill production and flat costs".

The company estimated that business disruption related to the severe hurricanes experienced in the US and central America during the third quarter cost the company 2 cents per share.

"The effect of these recent storms, especially higher virgin fibre and transportation costs, will linger into the fourth quarter," according to the company.

Smurfit Stone is North America's largest manufacturer of paper-based packaging.

Shares in Smurfit Stone rose four cents in New York yesterday, closing at $17.63.