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Avery Dennison (AVY) to Report Q4 Earnings: What's in Store?
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Avery Dennison Corporation (AVY - Free Report) is scheduled to report fourth-quarter 2022 results before the opening bell on Feb 02.
Q4 Estimates
The Zacks Consensus Estimate for fourth-quarter total sales is pegged at $2.21 billion, suggesting an improvement of 1% from the prior-year quarter’s reported figure. The consensus mark for the company’s earnings per share is pinned at $2.10, indicating a year-over-year decrease of 1.4%. The estimate has moved down 8% in the past 60 days.
Q3 Performance
Avery Dennison’s revenues and earnings improved year over year in third-quarter 2022. However, the company missed the Zacks Consensus Estimate on both counts. The company has a trailing four-quarter earnings surprise of 4.4%, on average.
Avery Dennison has been witnessing solid demand for the labeling of non-durable consumer goods like food, beverage, home and personal care products. This is likely to get reflected in the company’s fourth-quarter sales, as around 40% of its revenues come from these products.
The Zacks Consensus Estimate for the Label and Graphic Materials segment’s fourth-quarter sales is pegged at $1,374 million, calling for a 3.2% year-over-year increase. Strong demand for consumer-packaged goods and ongoing e-commerce trends are likely to have aided the business in the quarter. Volume improvement, focus on high-value categories, led by specialty labels, and contributions from productivity and pricing initiatives are anticipated to have buoyed the segment’s results in the quarter under review.
However, these tailwinds are likely to have been slightly impacted by soft automotive end markets and supply-chain challenges. The Zacks Consensus Estimate for the segment’s adjusted operating income is pegged at $169 million, suggesting year-over-year growth of 2.4%.
The Retail Branding and Information Solutions segment’s sales in the fourth quarter are likely to have been aided by consistent strength in Radio-frequency identification, strong growth in the Intelligent Labels business and high-value categories, as well as robust growth in external embellishments. The Zacks Consensus Estimate for the segment’s October-December quarter’s sales is pegged at $631 million, indicating a decline of 4.2% from the prior-year quarter's reported figure of $659 million.
The downside is likely to have been driven by a decline in demand for graphics and products serving durable and industrial end markets. Also, base apparel business volume is expected to have been impacted by inventory reduction efforts by some brands and retailers. The Zacks Consensus Estimate for the segment’s operating income is pegged at $78 million, indicating a decline of 12.3% from the prior-year quarter’s reported figure of $89 million.
The Zacks Consensus Estimate for the Industrial and Healthcare Materials segment’s sales is pegged at $186 million, down 3.6% from the prior-year quarter's reported level. The Zacks Consensus Estimate for the segment's adjusted operating income is pinned at $18.18 million, up 1% from the 2021 reported figure.
Avery Dennison has been executing several pricing and re-engineering actions to mitigate inflationary cost pressure. It has also announced additional price increases in most of its businesses worldwide. These are likely to have supported the company’s margins in the quarter under discussion. Supply-chain-related challenges, unfavorable impacts of foreign currency translation, and rising raw material, labor and freight costs are expected to have offset these benefits in the fourth quarter.
What the Zacks Model Indicates
Our proven model does not conclusively predict an earnings beat for Avery Dennison this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, but that is not the case here.
You can uncover the best stocks before they're reported with our Earnings ESP Filter.
Earnings ESP: Avery Dennison has an Earnings ESP of -0.32%.
Zacks Rank: Avery Dennison currently carries a Zacks Rank of 4 (Sell).
Avery Dennison’s shares have lost 8.8% in the past year compared with the industry’s decline of 7.7%.
Image Source: Zacks Investment Research
Stocks Poised to Beat Earnings Estimates
Here are some Industrial Products stocks, which, according to our model, have the right combination of elements to post an earnings beat in their upcoming releases:
Deere & Co. (DE - Free Report) currently has an Earnings ESP of +2.30% and a Zacks Rank #2. The Zacks Consensus Estimate for DE’s first-quarter fiscal 2023 earnings has moved 1.5% north in the past 60 days and is currently pegged at $5.51 per share. The consensus mark suggests year-over-year growth of 88.7%
The Zacks Consensus Estimate for DE’s quarterly revenues is pegged at $11.4 billion, indicating growth of 33.9% from the prior-year quarter’s reported level. DE has a trailing four-quarter earnings surprise of 7.1%, on average.
Xylem Inc. (XYL - Free Report) currently has an Earnings ESP of +0.63% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings has been unchanged in the past 60 days and is pegged at 79 cents per share. This suggests year-over-year growth of 25.4%
The Zacks Consensus Estimate for XYL’s quarterly revenues is pegged at $1.4 billion, indicating year-over-year growth of 6.1%. XYL has a trailing four-quarter earnings surprise of 13.3%, on average.
Illinois Tool Works Inc. (ITW - Free Report) currently has an Earnings ESP of +1.92% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings has increased 0.4% in the past 60 days and is pegged at $2.61 per share. This suggests year-over-year growth of 33.8%
The Zacks Consensus Estimate for quarterly revenues is pegged at $3.9 billion, indicating growth of 5.3% from the prior-year quarter’s reported level. ITW has a trailing four-quarter earnings surprise of 4.2%, on average.
Image: Bigstock
Avery Dennison (AVY) to Report Q4 Earnings: What's in Store?
Avery Dennison Corporation (AVY - Free Report) is scheduled to report fourth-quarter 2022 results before the opening bell on Feb 02.
Q4 Estimates
The Zacks Consensus Estimate for fourth-quarter total sales is pegged at $2.21 billion, suggesting an improvement of 1% from the prior-year quarter’s reported figure. The consensus mark for the company’s earnings per share is pinned at $2.10, indicating a year-over-year decrease of 1.4%. The estimate has moved down 8% in the past 60 days.
Q3 Performance
Avery Dennison’s revenues and earnings improved year over year in third-quarter 2022. However, the company missed the Zacks Consensus Estimate on both counts. The company has a trailing four-quarter earnings surprise of 4.4%, on average.
Avery Dennison Corporation Price and EPS Surprise
Avery Dennison Corporation price-eps-surprise | Avery Dennison Corporation Quote
Factors at Play
Avery Dennison has been witnessing solid demand for the labeling of non-durable consumer goods like food, beverage, home and personal care products. This is likely to get reflected in the company’s fourth-quarter sales, as around 40% of its revenues come from these products.
The Zacks Consensus Estimate for the Label and Graphic Materials segment’s fourth-quarter sales is pegged at $1,374 million, calling for a 3.2% year-over-year increase. Strong demand for consumer-packaged goods and ongoing e-commerce trends are likely to have aided the business in the quarter. Volume improvement, focus on high-value categories, led by specialty labels, and contributions from productivity and pricing initiatives are anticipated to have buoyed the segment’s results in the quarter under review.
However, these tailwinds are likely to have been slightly impacted by soft automotive end markets and supply-chain challenges. The Zacks Consensus Estimate for the segment’s adjusted operating income is pegged at $169 million, suggesting year-over-year growth of 2.4%.
The Retail Branding and Information Solutions segment’s sales in the fourth quarter are likely to have been aided by consistent strength in Radio-frequency identification, strong growth in the Intelligent Labels business and high-value categories, as well as robust growth in external embellishments. The Zacks Consensus Estimate for the segment’s October-December quarter’s sales is pegged at $631 million, indicating a decline of 4.2% from the prior-year quarter's reported figure of $659 million.
The downside is likely to have been driven by a decline in demand for graphics and products serving durable and industrial end markets. Also, base apparel business volume is expected to have been impacted by inventory reduction efforts by some brands and retailers. The Zacks Consensus Estimate for the segment’s operating income is pegged at $78 million, indicating a decline of 12.3% from the prior-year quarter’s reported figure of $89 million.
The Zacks Consensus Estimate for the Industrial and Healthcare Materials segment’s sales is pegged at $186 million, down 3.6% from the prior-year quarter's reported level. The Zacks Consensus Estimate for the segment's adjusted operating income is pinned at $18.18 million, up 1% from the 2021 reported figure.
Avery Dennison has been executing several pricing and re-engineering actions to mitigate inflationary cost pressure. It has also announced additional price increases in most of its businesses worldwide. These are likely to have supported the company’s margins in the quarter under discussion. Supply-chain-related challenges, unfavorable impacts of foreign currency translation, and rising raw material, labor and freight costs are expected to have offset these benefits in the fourth quarter.
What the Zacks Model Indicates
Our proven model does not conclusively predict an earnings beat for Avery Dennison this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, but that is not the case here.
You can uncover the best stocks before they're reported with our Earnings ESP Filter.
Earnings ESP: Avery Dennison has an Earnings ESP of -0.32%.
Zacks Rank: Avery Dennison currently carries a Zacks Rank of 4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Price Performance
Avery Dennison’s shares have lost 8.8% in the past year compared with the industry’s decline of 7.7%.
Image Source: Zacks Investment Research
Stocks Poised to Beat Earnings Estimates
Here are some Industrial Products stocks, which, according to our model, have the right combination of elements to post an earnings beat in their upcoming releases:
Deere & Co. (DE - Free Report) currently has an Earnings ESP of +2.30% and a Zacks Rank #2. The Zacks Consensus Estimate for DE’s first-quarter fiscal 2023 earnings has moved 1.5% north in the past 60 days and is currently pegged at $5.51 per share. The consensus mark suggests year-over-year growth of 88.7%
The Zacks Consensus Estimate for DE’s quarterly revenues is pegged at $11.4 billion, indicating growth of 33.9% from the prior-year quarter’s reported level. DE has a trailing four-quarter earnings surprise of 7.1%, on average.
Xylem Inc. (XYL - Free Report) currently has an Earnings ESP of +0.63% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings has been unchanged in the past 60 days and is pegged at 79 cents per share. This suggests year-over-year growth of 25.4%
The Zacks Consensus Estimate for XYL’s quarterly revenues is pegged at $1.4 billion, indicating year-over-year growth of 6.1%. XYL has a trailing four-quarter earnings surprise of 13.3%, on average.
Illinois Tool Works Inc. (ITW - Free Report) currently has an Earnings ESP of +1.92% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings has increased 0.4% in the past 60 days and is pegged at $2.61 per share. This suggests year-over-year growth of 33.8%
The Zacks Consensus Estimate for quarterly revenues is pegged at $3.9 billion, indicating growth of 5.3% from the prior-year quarter’s reported level. ITW has a trailing four-quarter earnings surprise of 4.2%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.