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Avery earnings beat expectations

Earnings Roundup

October 24, 2007|From Times Wire Services

Avery Dennison Corp., a maker of labels and retail tagging systems, posted a stronger-than-expected quarterly profit after lower taxes.

The company also offered a full-year profit forecast that could top expectations.

Net income in the third quarter fell 31% to $58.4 million, or 59 cents a share, compared with $85 million, or 85 cents, a year earlier.

Excluding one-time items, it earned $1 a share. That was 10 cents above what analysts polled by Reuters Estimates forecasted.

However, Bank of America analyst George Staphos said a lower-than-expected tax rate contributed about 8 cents a share to the results.

Sales were up 19% to $1.68 billion, ahead of forecasts for $1.66 billion. However, Avery said excluding acquisitions, divestitures and the effect of the weak U.S. dollar, sales were essentially flat.

The Pasadena-based company said it saw weak retail markets in the United States and softening demand in Europe, and was responding with a renewed focus on improving efficiency and cutting costs, including closing two facilities in Mexico.

The company said it expected 2007 earnings before items of $3.75 to $3.85 a share, compared with Wall Street estimates of $3.76 a share. It said a recent acquisition and a weaker U.S. dollar would help increase full-year sales by 12.5% to 13.5%.

Avery shares closed up $3.64 at $59.30.

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