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Avery Dennison Corporation (AVY - Free Report) reported adjusted earnings of 99 cents per share in its preliminary results for fourth-quarter 2016, which climbed 16% from 85 cents earned in the year-ago quarter. Earnings also beat the Zacks Consensus Estimate of 93 cents.
Including restructuring costs and other items, earnings from continuing operations were 69 cents per share in the quarter, compared with 61 cents in the prior-year quarter.
Total revenue jumped 7% to $1,550.8 million from $1,454.8 million in the year-earlier quarter. Moreover, revenues came above the Zacks Consensus Estimate of $1,501 million. On an organic basis, sales were up 5% year over year.
Avery Dennison Corporation Price, Consensus and EPS Surprise
Cost of sales in the reported quarter went up 5.9% year over year to $1,125 million. Gross profit increased around 8.4% to $425.4 million, with gross margin expanding 40 basis points (bps) to 27.4%.
Marketing, general and administrative expenses were $279.8 million compared with $266.3 million in the year-ago quarter. Adjusted operating profit advanced 15.6% year over year to $145.6 million. Adjusted operating margin advanced 70 bps on a year-over-year basis to 9.4%.
Segmental Performance
Avery Dennison announced its new operating structure. The Label and Graphic Materials segment includes Label and Packaging Materials, Graphics Solutions, and Reflective Solutions (all previously reported in Pressure-sensitive Materials). The Industrial and Healthcare Materials segment includes Performance Tapes (previously reported in Pressure-sensitive Materials), Fasteners Solutions (previously reported in Retail Branding and Information Solutions), and Vancive Medical Technologies (previously reported as a standalone segment). Retail Branding and Information Solutions now includes tickets, tags, and labels for apparel, radio-frequency identification, and Printer Solutions.
Revenues from the Label and Graphic Materials segment went up around 10% to $1,063.8 million. On an organic basis, sales grew 7%. Adjusted operating profit rose 17% to $122.6 million from $104.8 million in the year-ago quarter.
Revenues from the Retail Branding and Information Solutions segment grew 3% to $375.9 million from $363.2 million in the year-earlier quarter. Organic sales increased 5%. The segment’s adjusted operating income surged 33% to $37.5 million.
The Industrial and Healthcare Materials segment reported net sales of $111 million, down 8% from $121 million in the year-ago quarter. The segment reported adjusted operating income of $10.8 million compared to an operating profit of $10.3 million a year ago.
Financial Updates
At the end of 2016, Avery Dennison generated cash and cash equivalents of $195 million, which jumped from $158.8 million as of Jan 2, 2016. Cash flow from operations came in at $585.3 million in 2016 compared with $473.7 million in 2015.
At the end of 2016, Avery Dennison’s long-term debt decreased to $713.4 million, compared with $963.6 million at the end of 2015.
In 2016, Avery Dennison repurchased 3.8 million shares for a total cost of $262 million. The company reduced its share count by 2 million. The cost of repurchases, net of proceeds from stock option exercises is $191 million.
Cost-reduction Activities
In 2016, Avery Dennison realized approximately $82 million in pre-tax savings from restructuring. The company incurred restructuring charges of approximately $20 million.
2016 Performance
Avery Dennison reported adjusted earnings per share of $4.02 in 2016, up 17% from $3.44 per share recorded in the prior year. Earnings outpaced the Zacks Consensus Estimate of $3.97 per share. Including one-time items, the bottom line came in at $3.54, climbed 20% from $2.95 recorded in 2015.
Revenues grew 2% year over year to $6.09 billion from $6 billion in 2015. Revenues came ahead of the Zacks Consensus Estimate of $6.04 billion.
Guidance
For 2017, Avery Dennison expects its adjusted earnings per share to lie in the range of $4.30–$4.50. The company remains confident about the consistent execution of strategies that continues to enhance its competitive advantage, while driving profitable growth and improving returns.
Share Price Performance
In the last one year, Avery Dennison has underperformed the Zacks classified Office Supplies & Forms sub-industry with respect to price performance. The stock gained 22%, while the industry rose 26.6% over the same time frame.
Zacks Rank & Key Picks
Currently, Avery Dennison carries a Zacks Rank #4 (Sell).
ABB Ltd has a positive average earnings surprise of 23.5% for the last four quarters. Altra Industrial Motion generated a positive average earnings surprise of 8.06% over the trailing four quarters. Apogee has delivered an average positive earnings surprise of 13.24% in the past four quarters.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
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Avery Dennison (AVY) Tops Q4 Earnings, Provides '17 View
Avery Dennison Corporation (AVY - Free Report) reported adjusted earnings of 99 cents per share in its preliminary results for fourth-quarter 2016, which climbed 16% from 85 cents earned in the year-ago quarter. Earnings also beat the Zacks Consensus Estimate of 93 cents.
Including restructuring costs and other items, earnings from continuing operations were 69 cents per share in the quarter, compared with 61 cents in the prior-year quarter.
Total revenue jumped 7% to $1,550.8 million from $1,454.8 million in the year-earlier quarter. Moreover, revenues came above the Zacks Consensus Estimate of $1,501 million. On an organic basis, sales were up 5% year over year.
Avery Dennison Corporation Price, Consensus and EPS Surprise
Avery Dennison Corporation Price, Consensus and EPS Surprise | Avery Dennison Corporation Quote
Cost of sales in the reported quarter went up 5.9% year over year to $1,125 million. Gross profit increased around 8.4% to $425.4 million, with gross margin expanding 40 basis points (bps) to 27.4%.
Marketing, general and administrative expenses were $279.8 million compared with $266.3 million in the year-ago quarter. Adjusted operating profit advanced 15.6% year over year to $145.6 million. Adjusted operating margin advanced 70 bps on a year-over-year basis to 9.4%.
Segmental Performance
Avery Dennison announced its new operating structure. The Label and Graphic Materials segment includes Label and Packaging Materials, Graphics Solutions, and Reflective Solutions (all previously reported in Pressure-sensitive Materials). The Industrial and Healthcare Materials segment includes Performance Tapes (previously reported in Pressure-sensitive Materials), Fasteners Solutions (previously reported in Retail Branding and Information Solutions), and Vancive Medical Technologies (previously reported as a standalone segment). Retail Branding and Information Solutions now includes tickets, tags, and labels for apparel, radio-frequency identification, and Printer Solutions.
Revenues from the Label and Graphic Materials segment went up around 10% to $1,063.8 million. On an organic basis, sales grew 7%. Adjusted operating profit rose 17% to $122.6 million from $104.8 million in the year-ago quarter.
Revenues from the Retail Branding and Information Solutions segment grew 3% to $375.9 million from $363.2 million in the year-earlier quarter. Organic sales increased 5%. The segment’s adjusted operating income surged 33% to $37.5 million.
The Industrial and Healthcare Materials segment reported net sales of $111 million, down 8% from $121 million in the year-ago quarter. The segment reported adjusted operating income of $10.8 million compared to an operating profit of $10.3 million a year ago.
Financial Updates
At the end of 2016, Avery Dennison generated cash and cash equivalents of $195 million, which jumped from $158.8 million as of Jan 2, 2016. Cash flow from operations came in at $585.3 million in 2016 compared with $473.7 million in 2015.
At the end of 2016, Avery Dennison’s long-term debt decreased to $713.4 million, compared with $963.6 million at the end of 2015.
In 2016, Avery Dennison repurchased 3.8 million shares for a total cost of $262 million. The company reduced its share count by 2 million. The cost of repurchases, net of proceeds from stock option exercises is $191 million.
Cost-reduction Activities
In 2016, Avery Dennison realized approximately $82 million in pre-tax savings from restructuring. The company incurred restructuring charges of approximately $20 million.
2016 Performance
Avery Dennison reported adjusted earnings per share of $4.02 in 2016, up 17% from $3.44 per share recorded in the prior year. Earnings outpaced the Zacks Consensus Estimate of $3.97 per share. Including one-time items, the bottom line came in at $3.54, climbed 20% from $2.95 recorded in 2015.
Revenues grew 2% year over year to $6.09 billion from $6 billion in 2015. Revenues came ahead of the Zacks Consensus Estimate of $6.04 billion.
Guidance
For 2017, Avery Dennison expects its adjusted earnings per share to lie in the range of $4.30–$4.50. The company remains confident about the consistent execution of strategies that continues to enhance its competitive advantage, while driving profitable growth and improving returns.
Share Price Performance
In the last one year, Avery Dennison has underperformed the Zacks classified Office Supplies & Forms sub-industry with respect to price performance. The stock gained 22%, while the industry rose 26.6% over the same time frame.
Zacks Rank & Key Picks
Currently, Avery Dennison carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the same space include ABB Ltd , Altra Industrial Motion Corp. and Apogee Enterprises, Inc. (APOG - Free Report) . All three of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ABB Ltd has a positive average earnings surprise of 23.5% for the last four quarters. Altra Industrial Motion generated a positive average earnings surprise of 8.06% over the trailing four quarters. Apogee has delivered an average positive earnings surprise of 13.24% in the past four quarters.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>