Avery Dennison Corp Earnings: Revenue Falls After Four Straight Increases, Net Income Drops

S&P 500 (NYSE:SPY) component Avery Dennison Corporation (NYSE:AVY) reported its results for the fourth quarter. Avery Dennison is a global manufacturer of pressure-sensitive materials, office products, and a variety of paper products. It provides businesses and consumers with identification solutions and converted products, such as tickets, tags, and labels.

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Avery Dennison Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the paper company fell to $22.2 million (21 cents per share) vs. $114.2 million ($1.06 per share) a year earlier. This is a decline of 80.6% from the year earlier quarter.

Revenue: Fell 0.5% to $1.45 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: AVY reported adjusted net income of 36 cents per share. By that measure, the company fell short of mean estimate of 46 cents per share. It fell short of the average revenue estimate of $1.6 billion.

Quoting Management: “Despite the challenges of softening volumes and inflation in 2011, we increased operating income before restructuring costs, and generated nearly $300 million of free cash flow,” said Dean Scarborough, Avery Dennison chairman, president and CEO. “Our employees did an outstanding job of meeting this year’s challenges with a strong focus on pricing, productivity, and working capital, and I want to thank them for their discipline and dedication. “We also announced earlier this month an agreement to sell our Office and Consumer Products business, consistent with our strategy to maximize its value for shareholders,” Scarborough said. “For 2012, although the economic environment remains uncertain, we expect improved earnings, solid free cash flow, and increased return of cash to shareholders.”

Key Stats:

The company has now seen net income fall in each of the last four quarters. In the third quarter, net income fell 22.4% while the figure fell 12.5% in the second quarter and 18.1% in the first quarter.

The company has now fallen short of estimates in the last two quarters. In the third quarter, it missed expectations by 10 cents with net income of 48 cents versus a mean estimate of net income of 58 cents per share.

Looking Forward: Expectations for the first quarter of the next fiscal year have not changed from 54 cents. For the fiscal year, the average estimate has moved down from $2.25 a share to $2.23 over the last ninety days.

Competitors to Watch: MeadWestvaco Corp. (NYSE:MWV), Smurfit-Stone Container Corp. (NYSE:SSCC), Bemis Company, Inc. (NYSE:BMS), Verso Paper Corp. (NYSE:VRS), ACCO Brands Corporation (NYSE:ABD).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com