The Paper and Industrial Converted Products, Packaging Services and Consumer Services division sales all fell year-on-year for the period ending 1 July.
Sonoco said normal seasonality, lower volumes, negative mix and the disposition of Brazilian plastics operations and closure of a Canadian flexible packaging plant contributed to the negative numbers.
Net income slipped to $51.3m from $53.4m in the period ending 3 July 2011.
Tegrant drives growth
The Protective Packaging segment sales were $142m compared with $26m in Q2 2011 and $138m in Q1 2012 due to the Q4 2011 acquisition of protective packaging firm Tegrant.
Sonoco said it reflects higher volume and improved margins driven by operating efficiencies and integration synergies.
Operating profit for the second quarter was $11.7m, compared with $3.4m in the second quarter of 2011 and $7m in the Q1 2012.
Harris E. DeLoach Jr., Sonoco chairman and chief executive officer, said: “Operating profits in our new Protective Packaging segment, created as a result of last year's acquisition of Tegrant Holding Corporation, improved 66% from the first quarter.
“Tegrant's operations comprise the majority of this segment and we are very pleased with the improvement we're seeing there in operating efficiencies and the progress being made in the integration."
Gross profit of $216m was 13% better than Q2 2011, with the improvement driven by Tegrant, favourable price cost relationships and improved manufacturing productivity, partially offset by negative mix and higher fixed costs.
The acquisition of Tegrant ensured net sales increased 6.6% to more than $1.2bn.
Segment Loss
Consumer Packaging sales fell $13m to $477m year-on-year due to lower volumes in the global composite can business.
Operating profit increased 6% year-on-year courtesy of productivity improvements and a positive price/cost relationship which more than offset negative volume and mix among other expenses.
However, it decreased $7.3m from Q1 2012 which Sonoco said was due to seasonability in their composite can and metal ends business.
The Paper and Industrial Converted Products segment sales fell $10m year-on-year due to the negative impact of foreign currency translation and lower recovered paper prices in recycling operations.
Segment operating profit was $39.7m in the second quarter, compared with $40.4m in the second quarter of 2011 with exchange rates offset by positive price/cost relationship and improvements in productivity.
The Packaging Services segment sales dropped $18m to $108m year-on-year and $7m from Q1 2012 courtesy of the loss of a contract packaging customer.
Segment operating profit was $4m in the quarter, compared with $8.7m in the second quarter of 2011, resulting in a 54% decline due to the lost contract.
DeLoach added: " While we are encouraged by the progression of improvement in many of our businesses in the first half of the year, general economic conditions continue to be challenging and our customers' long-term order patterns remain difficult to predict.
“Accordingly, we are focused on implementing operating excellence initiatives to improve our manufacturing productivity and working to further reduce costs and control spending.
“Also, we expect to complete several important growth projects this year, including the third-quarter start-up of our new rigid plastics container plant in Columbus, Ohio.”