Avery Dennison 4Q Profit Up On Charges; Shares Fall Amid View

Date : 01/29/2010 @ 9:33AM
Source : Dow Jones News
Stock : Avery Dennison Corp. (AVY)
Quote : 98.76  -0.06 (-0.06%) @ 4:02PM

Avery Dennison 4Q Profit Up On Charges; Shares Fall Amid View

Avery Dennison (NYSE:AVY)
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Avery Dennison Corp.'s (AVY) fourth-quarter earnings rose 17% on prior-year charges as the office-supply and label manufacturer said its sales eked higher and margins increased.

The company also forecast 2010 earnings of $2 to $2.30 a share if organic sales--which exclude acquisitions, foreign currency translation and the impact of an extra week in the 2009 fiscal year--remain flat. Avery Dennison said that if sales rise 5%, earnings would be 70 cents higher. Analysts surveyed by Thomson Reuters expected $2.90 in earnings on a 6% revenue increase.

Shares dropped 7.1% to $35.40 premarket as the latest quarter's profit was well below analysts' expectations.

"While end markets remain soft, fourth-quarter sales reflect stabilizing inventory levels, resulting in solid improvement compared to the first half of the year," said President and Chief Executive Dean Scarborough.

Avery Dennison has struggled with dwindling sales as demand has dropped during the economic downturn. The company has worked to cut costs and improved margins, helping to soften the blow to its bottom line.

For the quarter ended Jan. 2, profit was $49.9 million, or 47 cents a share, up from $42.6 million, or 43 cents, a year earlier. Excluding restructuring and other impacts, earnings fell to 44 cents from 65 cents.

Revenue rose 0.7% to $1.52 billion.

Analysts polled by Thomson Reuters had most recently forecast earnings of 68 cents on $1.51 billion in revenue.

Gross margin rose to 27.3% from 25%.

-By Nathan Becker, Dow Jones Newswires; 212-416-2855; nathan.becker@dowjones.com


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