Who doesn't love Bubble Wrap? Whether it's protecting your valuable breakables during shipment or serving as a stress-relieving toy, most adults can't walk by the stuff without snapping a few of the air cells. Seeing the strong results for Sealed Air (NYSE:SEE) on Monday, shareholders might just want to go buy a roll and celebrate.

This maker of Bubble Wrap and other packaging posted net sales growth of 9% for the fourth quarter, but the real pop came in earnings. Stripping out charges and theoretically one-time items, the company posted earnings per share of $0.81 -- well ahead of the Wall Street guess of $0.67 -- up 16% from last year. Forward guidance was also strong; the company now expects 2005 earnings of $2.95 to $3.05 a share -- also well above the prior analysts' guess of $2.86.

Growth in the period was boosted by about 4% from the benefits of foreign currency, though volumes shipped did increase at a nice 3.5% clip. Despite higher sales volumes, higher petrochemical costs hurt margins by about 1.2%. The higher cost of petrochemical inputs (mostly resins) will continue to put some pressure on margins, but the company expects this burden to ease after the first quarter of 2005 and on through 2006 as more resin-producing capacity comes online.

Investors who appreciate the virtues of cash flow can find even more good news. Excluding the restructuring charge, the company managed to produce structural free cash flow in excess of $300 million for the full year of 2004. Management put this cash to work during the year, buying back $86 million of stock and retiring about $200 million in debt.

Even though Bubble Wrap is a lot of fun, packaging is a brutally competitive business, and the company has a modest recent record of revenue growth. Nevertheless, an optimist could counter that as people continually buy more products over the Internet that must be shipped to them, there will be an increasing demand for Sealed Air's packaging materials. What's more, a 20%-plus return on equity should help cushion the stock a little. All the same, a trailing P/E and EV/SFCF ratio of around 18 each don't spell "cheap" to this Fool. While the stock might look good on a dip, investors might be better just sticking to the Bubble Wrap for now.

Fool contributor Stephen Simpson, CFA, has no ownership interest in any stocks mentioned.