Rock-Tenn F2Q09 (Qtr End 3/31/09) Earnings Call Transcript

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2009-04-28 12:52:17.0

Tags: Gross Domestic Product, Pickup, J.P. Morgan Chase & Co., Call Transcript, Earnings, Seeking Alpha, Rock-Tenn Co.

Question-and-Answer Session

Operator

Thank you. At this time, we're ready to begin the question-and-answer session. (Operator Instructions). The first questions does come from Claudia Hueston of JPMorgan, your line is open.

Claudia Hueston - JPMorgan

Hi, thanks very much. Good morning.

Steven Voorhees

Good morning.

Claudia Hueston - JPMorgan

I was hoping you could put just a little bit more color around the trends you're seeing in corrugated, and the pickup that you noted in March and April, are there any particular pockets of strength or weakness in anyway to maybe, what gives you confidence I guess it's more than just a little bit of a seasonal pickup?

Steven Voorhees

Well, Claudia what was your GDP down in the quarter?

Claudia Hueston - JPMorgan

Yeah.

Steven Voorhees

Exactly. So, if corrugated box volumes are down three times GDP in -- from mid-November to mid-March, I don't think that's sustainable. So the pickup we've seen has been across our customer base, it's not one particular sector or segment of the industry.

And so it's fairly broad based and an 8% increase relative to say six week or even two to three months period of volume is a significant difference, it feels different. And so that's why I think that we're very likely had come off of the bottom. A, I think the bottom was unsustainably low and I think I've been pretty consistent expressing that view relative to underlying changes in GDP and unemployment.

So that's the first reason and then the second is like I said six weeks is not a season, but six weeks is not an insignificant period of time.

Claudia Hueston - JPMorgan

Yeah. And as you talk to customers both in corrugated and cost to other businesses, do you feel that confidence has improved or there visibility is starting to improve. I remember last quarter, you couldn't really give much color on displays but it sounds like you've got a better sense now?

Steven Voorhees

Yes, I do feel more confident about the marketplace from -- it's more customer activity though and what we see in terms of backlog then it would necessarily be there views of the marketplace going forward.

Claudia Hueston - JPMorgan

And then just on the folding carton side, it seems like you obviously have been gaining your volumes are better than the industry. Do you think that's more a fraction of share gains or is it your customer base there that's driving that?

 

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