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To: Softechie who wrote (1501)	7/20/2001 12:53:08 AM
From: Softechie	Respond to of 2155

Crown Cork shares surge on cashflow outlook -------------------------------------------------------------------------------- By David Howard Sinkman NEW YORK, July 19 (Reuters) - Shares in troubled packaging giant Crown Cork & Seal Co. Inc. surged more than 18 percent Thursday after it posted a small quarterly profit and assured analysts in a conference call that it could make its short-term debt payments. The Philadelphia-based company, which has been plagued for months by difficult market conditions and fears of asbestos liabilities, said in its analyst meeting Thursday morning its cash flow would be stronger than projected, and asbestos payments were in line with last year. Shares rose 17.97 percent to $3.48 in afternoon trade on the New York Stock Exchange, after earlier rising as high as $3.55 "This is a relief rally, nothing more. People were looking for things to get worse, and are relieved that things are not so bad," said Bear Stearns analyst Gary Schneider, who has maintained a hold rating on the company since 1996. With Crown Cork facing a mounting sea of liabilities, investors have feared the packaging company would not be able to meets its near-term debt obligations. Crown Cork put some of these short-term fear to rest Thursday, saying its free cash flow, which was projected at $100 million, would be triple that amount, at about $300 million for year. With $400 million in asset sales coming up, the company will be able to repay $400 million in near-term asset-backed liabilities, say analysts. Analysts warn, however, that the company is nowhere near out of the woods, despite announcing a small second-quarter profit Wednesday. The bottom line, said Lehman Brothers analyst Joel Tiss, is that the company still faces pricing pressure in a deteriorating market and is strapped with a "crazy" amount of debt given its low operating margins. The company owes $350 million in 2002 and $650 million in 2003 obligation, said Tiss. The problem is not that Crown Cork borrowed too much, but rather the bottom of its operating margins collapsed, said analysts. The company has also been hurt by falling pension income and higher borrowing costs. "This is a step in the right direction, but a real turnaround is going to take a lot more good news than just this, cautioned Midwest Research analyst Eric Bosshard. Crown Cork, which also makes beverage and food cans, plastic bottles and specialty closures, posted earnings Wednesday of 4 cents a share in the second-quarter which ended June 30, reversing a loss of $4 million, or 3 cents a share in the year-ago period. Year-ago results included a 53 cent provision for restructuring and jobs cuts. Without that, the company posted income of 50 cents a share during that period. Net sales fell almost 3 percent in the quarter to $1.9 billion, hit by what CEO John Conway described as "unsustainable low pricing in most of our markets." Shares in Crown Cork fell about 7.4 percent in the quarter, under-performing the S&P 500 Index which rose 5.52 percent. And shares in the company are down more than 60 percent this year, on Wednesday's close of $2.95. "Remember, that this used to be a $55 a share company," said Lehman Brothers analyst Joel Tiss. REUTERS Rtr 19:55 07-19-01