Avery Dennison Q2 Adj. Profit Beats View, Tightens 2014 Outlook

(RTTNews) - Avery Dennison Corp. (AVY) on Friday reported a 38 percent decline in profit for the second quarter from last year as higher expenses more than offset an increase in revenues.

However, adjusted earnings per share from continuing operations for the quarter beat analysts' expectations, while revenues matched their estimates. Looking ahead, the company tightened its earnings outlook for fiscal 2014.

Pasadena, California-based Avery Dennison's second-quarter net income was $42.5 million or $0.44 per share, down from $68.8 million or $0.68 per share in the same period last year.

In the latest quarter, the company realized about $10 million in savings from restructuring, net of transition costs related to the consolidation of PSM operations in Europe, and incurred restructuring costs of about $40 million.

Income from continuing operations declined to $44.4 million or $0.46 per share from $70.8 million or $0.70 per share last year.

Adjusted earnings from continuing operations for the quarter were $0.80 per share, compared to $0.71 per share in the year-ago quarter.

On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.79 per share for the quarter. Analysts' estimates typically exclude special items.

Avery Dennison, which makes pressure-sensitive label and packaging materials, said sales for the second quarter grew 4 percent to $1.62 billion from $1.55 billion in the same period last year. Analysts estimated revenues of $1.62 billion for the quarter.

Pressure sensitive materials sales for the quarter rose 6 percent from the year-ago period to $1.18 billion, and accounted for majority of the quarterly sales. Retail Branding and Information Solutions segment sales declined about 1 percent. Vancive Medical Technologies sales grew 9 percent to $20.5 million.

Looking ahead to fiscal 2014, Avery Dennison now forecasts earnings per share from continuing operations in a range of $2.65 to $2.75. Excluding an estimated $0.35 per share for restructuring costs and other items, the company expects adjusted earnings per share from continuing operations of $3.00 to $3.10.

Earlier, the company forecast full-year earnings per share from continuing operations of $2.60 to $2.90 and adjusted earnings per share from continuing operations of $2.90 to $3.20.

Analysts expect the company to earn $3.03 per share for the year.

AVY is currently trading at $50.88, down $0.02 or 0.04 percent on a volume of 68,818 shares.