Labelling expert Avery Dennison's Q2 sales grow 8% at $2.8bn
27 Jul '05
9 min read
The Retail Information Services segment reported sales of approximately $182 million, an increase of slightly more than 10 percent over the second quarter of 2004. Approximately two-thirds of the growth is due to the combined effect of the Rinke acquisition and currency translation, with the balance due to core unit volume growth.
Excluding restructuring costs, operating margin for the segment increased to 10.4 percent in the second quarter, compared with 10.1 percent a year ago, reflecting productivity improvement efforts, including movement of production from Hong Kong to lower cost operations in mainland China, as well as spending controls.
Businesses in the other specialty converting group reported sales of approximately $131 million, comparable to the prior year. Excluding asset impairment, operating margin for these businesses declined to 1.9 percent from 8.4 percent a year ago, largely due to higher spending related to the Company's radio frequency identification (RFID) division.
Outlook Reflecting improved profitability and the reduction in its tax rate, Avery Dennison is raising its earnings-per-share guidance for the full year to $2.95 to $3.20, from its previously announced expectation of $2.85 to $3.15. The Company's earnings guidance excludes the impact of restructuring and asset impairment charges.
Year-to-date charges and transition costs, net of gain on sale of assets, total $0.06 per share. Additionally, the Company anticipates modest costs associated with restructuring actions in the third quarter of 2005, with the possibility of more significant actions in the fourth quarter of 2005. The Company said its outlook anticipates continued weakness in core volume growth, with the expectation of relatively stable raw material costs.
marketing@alchempro.com
