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Crown Cork restructures
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September 22, 1998: 10:02 a.m. ET
Packaging maker slashing 2,700 jobs, sets $121M charge to boost earnings
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NEW YORK (CNNfn) - Blaming "unusual market factors" for its earnings downturn, Crown Cork & Seal said Tuesday it is slashing 2,700 jobs and buying back a portion of its stock in a cost-cutting effort to get business back on track.
Philadelphia-based Crown Cork & Seal, the world's largest maker of packaging containers, said it will buy back 7.5 percent of its stock and take a $121 million charge in the third quarter to cover the costs of restructuring.
The company also plans to cut capital expenditures to around $300 million a year, generating cash flow of about $1 billion over the next two years and $2.5 billion over the next four years.
As a result of the restructuring, the company said third-quarter earnings likely will be between 80 cents and 82 cents per share, compared with 90 cents in the year-ago quarter.
Moreover, Crown Cork said it hopes to save $64 million a year by cutting 7 percent of its work force.
"The initiatives we are outlining today will enable us to generate the highest possible returns from our strong competitive positions around the world," said Crown Cork Chairman and Chief Executive William J. Avery. "They reinforce our commitment to improved profitability and enhanced value to shareholders."
Avery blamed weak demand for food packaging, disruptions in normal trading patterns and global economic instability that has weakened currency in Mexico, Canada and Brazil.
Even so, the company said it expects earnings per share for 1998 to grow between 3 percent and 7 percent to about $2.30 or $2.40 per share.
In 1997, the company generated net sales of $8.5 billion from 247 manufacturing facilities located in 49 countries.
Shares of Crown Cork (CCK) closed Monday at 37-5/16 on the New York Stock Exchange. 
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Crown Cork and Seal
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