Avery Dennison (AVY) Tops Q4 Earnings On Cost Savings

Avery Dennison Corporation (AVY - Analyst Report) reported adjusted earnings of 90 cents per share in the fourth quarter of 2014, up 30% from 69 cents earned in the year-ago quarter, driven by its cost savings initiatives. The results beat the Zacks Consensus Estimate of 80 cents, a positive earnings surprise of 13%.

Including restructuring costs and other items, earnings from continuing operations were 75 cents per share in the quarter, compared with 45 cents in the year-ago quarter.

Total revenue edged up 1.3% to $1,605 million from $1,584 million in the prior-year quarter. Revenue, however, fell short of the Zacks Consensus Estimate of $1,608 million. On an organic basis, sales grew 1% year on year.

Cost of sales in the reported quarter rose 1.9% year over year to $1,190 million. Gross profit inched down 0.3% to $415 million while gross margin contracted 40 basis points (bps) to 25.9%.

Marketing, general and administrative expenses were $285 million versus $299 million in the year-ago quarter. Adjusted operating profit increased 10.6% to $130 million. Adjusted operating margin improved 70 bps to 8.1% on a year-over-year basis.
Segmental Performance

Total revenue in the Pressure-sensitive Materials segment increased 2% to $1,177 million. Label and Packaging Materials sales rose in the low-single digits. Sales for Graphics, Reflective and Performance Tapes increased in the mid-single digits. Adjusted operating profit increased 12% to $125 million in the quarter compared with $111 million in the year-ago quarter.

Total revenue from Retail Branding and Information Solutions segment declined 3% to $406 million from $417 million in the year-earlier quarter due lower volume in Europe and North America. The segment’s adjusted operating income dipped 12% to $27.6 million.

Vancive Medical Technologies segment reported net sales of $22.5 million, up 29% from $17.4 million in the year-ago quarter. The segment, however, reported an adjusted operating loss of $0.4 million, narrower than the year-ago quarter loss of $2.1 million.

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