Avery Dennison 2Q Profit Doubles As Revenue, Margin Increase

Date : 07/28/2010 @ 9:28AM
Source : Dow Jones News
Stock : Avery Dennison Corp. (AVY)
Quote : 99.71  0.92 (0.93%) @ 3:59PM

Avery Dennison 2Q Profit Doubles As Revenue, Margin Increase

Avery Dennison (NYSE:AVY)
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Avery Dennison Corp.'s (AVY) second-quarter earnings more than doubled, beating analysts' estimates, as the company's revenue rose and it saw better performance from its information-services segment.

The company also raised the bottom of its full-year profit forecast and boosted its revenue target.

Chairman and Chief Executive Dean Scarborough also noted that the company's core pressure-sensitive materials businesses "had solid results, including double-digit sales growth in all regions." He said the second half of this year would be more challenging than the first, as the second quarter is usually the company's strongest. Scarborough added the margin is expected to come under pressure from increasing raw-material costs and spending.

The office-supply and label manufacturer has seen recent strength in emerging markets and rising demand in its pressure-sensitive materials and retail information-services segments. The company also has boosted its margin of late.

Avery Dennison reported a profit of $83.8 million, or 78 cents a share, up from $39.8 million, or 38 cents a share, a year earlier. Excluding restructuring costs and other charges, per-share earnings rose to 94 cents from 56 cents. Revenue jumped 15% to $1.68 billion.

Analysts polled by Thomson Reuters had most recently forecast earnings of 66 cents a share on $1.58 billion in revenue.

Gross margin rose to 29.2% from 26.8% on the sales gains.

Sales of pressure-sensitive materials, the company's biggest segment by revenue, rose 16% as pretax operating profit increased 73%. The company's retail-information-services segment saw its revenue increase 24% as it swung to the black.

Shares rose 1.6% to $38.50 recently in premarket trading. The stock has risen 28% in the past 52 weeks.

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

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