Back to top

Analyst Blog

On May 17, 2013, Zacks Investment Research downgraded R.R. Donnelley & Sons to a Zacks Rank #5 (Strong Sell).

Why the Downgrade?

Donnelley reported first quarter 2013 non-GAAP earnings of 37 cents per share, which comfortably surpassed the Zacks Consensus Estimate by 4 cents. However, earnings per share declined 15.9% year over year, primarily due to margin contractions.

Revenues for the quarter were up a modest 0.5% year over year to $2.54 billion. Operating margin contracted 40 basis points (bps) on a year-over-year basis to 6.8% due to certain customer rebate adjustment, price pressure and unfavorable product mix.

Donnelley reiterated its fiscal 2013 guidance. For fiscal 2013, Donnelley expects revenues to be in the range of $10.1 billion to $10.3 billion, which remains flat compared to 2012.

Adjusted earnings before interest, tax, depreciation and amortization (“EBITDA”) are expected to be in the range of 11.2% to 11.4% for fiscal 2013, which is slightly lower than 12.0% reported in 2012.

The Zacks Consensus Estimate for the second quarter of 2013 has declined 17.0% (8 cents) to 39 cents over the last 60 days.

The Zacks Consensus Estimate for 2013 decreased 9.5% (16 cents) to $1.53 per share over the last 60 days. The Zacks Consensus Estimate for 2014 dropped 6.6% (10 cents) to $1.52 per share over the same period.

Other Stocks to Consider

Not all printing and outsourcing services providers are performing as poorly as Donnelley. We recommend Barrett Business Services (BBSI - Snapshot Report), which has a Zacks Rank #1 (Strong Buy). Genpact Ltd (G - Snapshot Report) and Convergys Corp (CVG - Snapshot Report), both having a Zacks Rank #2 (Buy), are also looking good at present.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%
STRATTEC SE… STRT 80.24 +3.00%