Updated

Tupperware Corp. (TUP) Monday posted a third-quarter profit versus break-even a year earlier, helped by improved results outside North America.

While the quarterly profit beat expectations, Tupperware narrowed its full-year forecast due partly to the declining impact of a weaker dollar, and its shares fell more than 2 percent.

"They basically blew away the third-quarter estimate and have a much more conservative guidance for the fourth quarter," said Eric Bosshard, an analyst at FTN Midwest Research (search).

The direct seller of plastic storage containers said it earned $12.9 million, or 22 cents per share, including 11 cents in gains from land development and 2 cents in re-engineering costs. A year ago, it posted nil net income and earnings per share.

Last month Tupperware said it would cut 28 jobs in the United States. It also forecast third-quarter earnings of 16 cents to 18 cents per share, or 8 cents to 10 cents per share excluding items. Analysts, on average, expected the Orlando, Fla.-based company to earn 9 cents per share, according to Reuters Estimates.

Tupperware narrowed its full-year earnings forecast to $1.30 to $1.35 per share from $1.28 to $1.38 per share. The company's view includes 13 cents from gains on land development, 6 cents of re-engineering costs, 11 cents positive impact from foreign currencies and 18 cents from lower hedging costs. Analysts, on average, expect a profit of $1.25 per share this year.

"If you look at the benefit that they've realized from currency it explains a lot of the earnings improvement this year," said Bosshard, who has a "sell" rating on Tupperware. He said currency represents 29 cents of incremental earnings in the current year.

Shares of Tupperware were down 35 cents, or 2 percent, at $16.91 in midday trading on the New York Stock Exchange (search) after slipping to $16.79.

Sales rose 2 percent to $255 million, but fell 1 percent excluding the impact of foreign currency due to declines in Japan and the United States, the company said.

In Europe, the company's largest segment, sales climbed 9 percent to $111.2 million, but were up just 1 percent excluding the impact of foreign currency on the comparison.

In Tupperware's North America unit, sales fell 13 percent to $38.8 million, due to an 11 percent decline in average active sales force. The unit's loss widened 17 percent to $7.6 million. Tupperware said it still expects sales to fall in the fourth quarter and into 2005 and the segment's full-year loss would exceed last year's.

Overall, Tupperware expects sales to climb slightly this year, but excluding the impact of foreign exchange, sales should be down slightly.

Tupperware also said it was negotiating a new $150 million revolving credit facility and that it has received preliminary commitments of more than the $150 million target, subject to agreement on documentation.