Office supplies maker Avery Dennison Corp. (AVY) Friday said fourth-quarter profit grew from last year, helped by a marginal increase in revenues as well as a higher tax benefit. However, on a per share basis, adjusted profit missed Wall Street view, sending the stock down over 9%.
The Pasadena, California-based company's fourth-quarter net income increased to $49.9 million or $0.47 per share from $42.6 million or $0.43 per share in the same quarter last year.
In the just concluded quarter, the company recorded $26.9 million in restructuring and other costs and charges, compared to $12.3 million in costs and charges last year.
Adjusted non-GAAP net income declined to $46.8 million or $0.44 per share from $64 million or $0.65 per share in the previous year.
On average, 8 analysts polled by Thomson Reuters expected the company to report earnings of $0.68 per share for the quarter. Analysts' estimates typically exclude special items.
Total net sales for the quarter rose to $1.522 billion from $1.512 billion reported last year. On an organic basis, sales dropped 1% from last year. Analysts expected revenues of $1.51 billion for the quarter.
Total operating income before interest and taxes dropped to $44.8 million from $56.3 million in the prior year. Operating margin before items declined to 4.8% from last year's restated 4.9%.
The company operates through four groups of businesses: Pressure-sensitive Materials, Retail Information Services, Office and Consumer Products and other specialty converting businesses.
In the latest quarter, Sales of Pressure-sensitive materials rose 5% to $846.6 million and operating income increased 46% to $58.6 million. In the segment, operating margin increased as productivity offset higher employee costs.
In Retails Information Services, sales for the quarter slipped 2% to $350.5 million, primarily reflecting reduced demand for apparel in the U.S. and Europe, and continued caution on the part of retailers. The division reported an operating loss of $12 million.
Office and Consumer Products generated $205.2 million during the period, down 9% from last year, due to weak end-market demand, led by slower corporate purchasing activity. The segment's operating income declined 54% to $19.2 million.
Other Specialty Converting businesses reported fourth-quarter revenues of $119.5 million, up 1% from last year, reflecting continuing weakness in the housing and construction industries. The division reported an operating loss of $15.3 million.
Income from operations before taxes slipped to $26.5 million from last year's $28.2 million. However, benefit from income taxes increased to $23.4 million from $14.4 million reported last year.
For the third quarter, the company's profit slipped to $62.5 million or $0.59 per share from $62.7 million or $0.63 per share reported last year, on higher one-time charges. Net sales for the third quarter declined 10% to $1.549 billion from $1.725 billion in the previous year.
For the full year, the company reported a net loss of $746.7 million or $7.21 per share, compared to net income of $266.1 million or $2.70 per share in the prior year. Analysts expected earnings of $2.18 per share on revenues of $5.94 billion.
The company reduced debt by about $300 million in the second half of 2009, resulting from dramatically improved working capital productivity, reduced capital spending, and reduced dividend.
Commenting on the results, Dean Scarborough, president and chief executive officer of Avery Dennison, said, "While end markets remain soft, fourth-quarter sales reflect stabilizing inventory levels, resulting in solid improvement compared to the first half of the year. Our restructuring and productivity initiatives helped us expand gross margin and continue to invest for the future.''
Among other players in the field, Bemis Co. Inc. (BMS) posted lower fourth-quarter profit totaling $28.99 million or $0.26 per share, compared to $33.21 million or $0.32 per share a year ago, hurt by charges and expenses. However, sales improved 4.4% to $905.88 million from $867.87 million in the previous year.
Looking ahead to 2010, Avery Dennison sees adjusted earnings in the range of $2.00-$2.30 per share and $2.70-$3.00 per share. Organic sales for the year are expected to grow flat to 5%. For 2010, analysts expect earnings in the range of $2.50-$3.25 per share with a consensus of $2.90 per share. Sales for the year are estimated to be $6.31 billion.
AVY is currently trading at $34.57, down $3.52 or 9.24%, on 1.21 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.