Avery Dennison Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Avery Dennison (NYSE:AVY) will unveil its latest earnings tomorrow, Wednesday, January 30, 2013. 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. .

Avery Dennison Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 49 cents per share, a rise of 25.6% from the company’s actual earnings for the year-ago quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. For the year, analysts are projecting profit of $2.03 per share, a decline of 6% from last year.

Past Earnings Performance: Last quarter, the company reported net income of 53 cents per share versus a mean estimate of profit of. The company has beaten estimates for the past three quarters.

Start 2013 better than ever by saving time and making money with your Limited Time Offer for our highly-acclaimed Stock Picker Newsletter. Click here for our fresh Feature Stock Pick now!

A Look Back: In the third quarter, profit rose 17.1% to $58.3 million (57 cents a share) from $49.8 million (47 cents a share) the year earlier, exceeding analyst expectations. Revenue fell 12.5% to $1.49 billion from $1.7 billion.

Here’s how Avery Dennison traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

avy

Stock Price Performance: Between October 26, 2012 and January 24, 2013, the stock price rose $3.69 (11.4%), from $32.25 to $35.94. The stock price saw one of its best stretches over the last year between November 15, 2012 and November 26, 2012, when shares rose for seven straight days, increasing 6.6% (+$2.09) over that span. It saw one of its worst periods between October 1, 2012 and October 10, 2012 when shares fell for eight straight days, dropping 6.3% (-$2.01) over that span.

Analyst Ratings: With two analysts rating the stock as a buy, one rating it as a sell and two rating it as a hold, there are indications of a bullish outlook.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of four-straight quarters of revenue decreases. Revenue fell 42.5% in the fourth quarter of the last fiscal year, 10.6% in first quarter and 11.2% in the second quarter and then fell again in the third quarter.

Last quarter’s earnings rise was a switch from preceding drops, so the upcoming earnings announcement is a chance to build on last quarter’s result. Net income fell in the fourth quarter of the last fiscal year, the first quarter and the second quarter before snapping that run with a profit increase in the third quarter.

Wall St. Revenue Expectations: Analysts predict a rise of 1.4% in revenue from the year-earlier quarter to $1.47 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.14 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.13 in the second quarter to the last quarter driven in part by an increase in current assets. Current assets increased 2% to $2.45 billion while liabilities rose by 1.5% to $2.15 billion.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.

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