(RTTNews) - Avery Dennison Corp. (AVY: News ), a maker of pressure-sensitive materials, office and consumer products, reported Tuesday a slight decline in third-quarter profit, on higher one-time charges. On an adjusted basis, earnings per share rose 1%, and significantly surpassed market projections, despite a 10% drop in net sales. The Pasadena, California-based company recorded poor performance in all segments, reflecting continuing tough market conditions.

Third-quarter net income decreased marginally to $62.5 million from $62.7 million in the prior year period. On a per share basis, net income dropped 6% to $0.59 from $0.63 a year ago.

The latest quarter results included charges of $24.3 million or $0.23 per share, related to certain restructuring and asset impairment charges, transition costs associated with acquisition integrations, and other items, compared to prior year's charges of $17.7 million or $0.18 per share.

On an adjusted basis, net income rose 8% to $86.8 million from $80.4 million in the prior year, and earnings per share edged up 1% to $0.82 from $0.81 last year.

On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.57 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter declined 10% to $1.549 billion from $1.725 billion in the comparable period. Five analysts estimated revenues of $1.47 billion for the quarter. On an organic basis, net sales dropped 6%.
Total operating income was $77.4 million, down 20% from $96.3 million last year. Operating margin declined to 3.8% from 3.9% a year ago. Total adjusted operating income dropped 1% to $112.9 million from prior year's $114 million, while adjusted operating margin rose to 7.3% from 6.6% in 2008.

Dean Scarborough, president and chief executive officer of Avery Dennison, commented, "In the face of continuing tough market conditions we increased operating margin, reflecting the strength of our franchise businesses and the effectiveness of our operating model. The combination of fixed-cost reductions and increasing variable margins positions the Company for strong profit growth when markets improve."

Scarborough added, "While the rate of volume decline in the third quarter improved compared with the first half of the year, this was largely due to a slowdown in inventory reductions. Our end-markets remain soft, and we continue to be cautious about the pace of their recovery."

To receive FREE breaking news email alerts for Avery Dennison Corp. and others in your portfolio

 1   2   3   4   Next Page