Avery Dennison Earnings Cheat Sheet: Four Quarters in a Row of Falling Profit

S&P 500 (NYSE:SPY) component Avery Dennison Corporation (NYSE:AVY) reported its results for the third 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 Third Quarter

Results: Net income for the paper company fell to $49.8 million (47 cents per share) vs. $64.2 million (60 cents per share) a year earlier. This is a decline of 22.4% from the year earlier quarter.

Revenue: Rose 3.6% to $1.7 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: AVY reported adjusted net income of 48 cents per share. By that measure, the company fell short of mean estimate of 59 cents per share. Analysts were expecting revenue of $1.67 billion.

Quoting Management: “The weak demand we experienced in the second quarter continued into the third and led to lower operating results,” said Dean Scarborough, Avery Dennison chairman, president and CEO. “We now expect these trends to continue in the fourth quarter, and as a result we have reduced our 2011 outlook. We continue to invest in innovation and launched a number of new products during the quarter. At the same time, our employees are doing a great job of controlling expenses and improving productivity. We are well positioned to drive long-term profitable growth once economic trends improve.”

Key Stats:

Revenue has risen the past four quarters. Revenue increased 2.7% to $1.73 billion in the second quarter. The figure rose 6.7% in the first quarter from the year earlier and climbed 7.6% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now seen net income fall in each of the last three quarters. In the second quarter, net income fell 12.5% from the year earlier, while the figure fell 18.1% in the first quarter.

The company fell short of forecasts after beating estimates in the previous two quarters. In the second quarter, it topped the mark by 3 cents, and in the first quarter, it was ahead by 4 cents.

Looking Forward: Over the last 30 days, analysts have not been optimistic about the company’s next quarter performance. The average estimate for the fourth quarter is now 72 cents per share, down from 74 cents. For the fiscal year, the average estimate has moved down from $2.59 a share to $2.52 over the last thirty 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), Office Depot (NYSE:ODP), Target (NYSE:TGT), OfficeMax (NYSE:OMX), Staples (NASDAQ:SPLS).

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(Source: Xignite Financials)