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Avery Dennison reports Q4 income drop

January 29, 2008

Avery Dennison has reported net income per share of $0.81 for the fourth quarter, down from $1.04 per share last year.

Avery Dennison, headquartered in Pasadena, CA, USA, reported net income per share of $0.81 for the fourth quarter, down from $1.04 per share last year. The company attributed the drop integration costs and interest expense related to the $1.3 billion acquisition of Paxar and other restructuring charges.

Net sales from continuing operations for the fourth quarter were $1.71 billion, up approximately 21 percent from $1.41 billion for the same quarter last year. Sales before the impact of the Paxar acquisition and foreign currency translation were down approximately 1 percent from the prior year.

The Company reported net income of $303.5 million or $3.07 per share for the full year 2007, compared with $373.2 million or $3.72 per share in the prior year. Results included restructuring and asset impairment charges, transition costs associated with the integration of Paxar, and other items, totaling $0.84 per share in 2007 and $0.12 per share in the prior year. Net sales were $6.31 billion in 2007, compared to $5.58 billion in the previous year.

“2007 was a challenging year as US retail markets slowed and market conditions for our pressure sensitive materials business weakened, causing us to miss our revenue growth and profit objectives for the year,” says Dean A. Scarborough, president and chief executive officer of Avery Dennison. ”We took a number of actions to mitigate the effects of weaker market conditions, including accelerating productivity programs and reducing expenses.”

“We continue to achieve solid results in the emerging markets, particularly in China and India where we have expanded our capacity with several new manufacturing facilities,” he added. “Our radio frequency identification business is gaining traction with the number of inlays sold in 2007 nearly tripling from the previous year. Buoyed by Paxar’s RFID business, we expect sales of RFID products to reach $50 million in 2008.”

Pressuressensitive materials reported sales of $890 million, up 9 percent from the prior year. Organic sales growth for the segment was approximately 2 percent, reflecting soft market conditions in North America and Europe.