Avery Dennison Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Avery Dennison (NYSE:AVY) will unveil its latest earnings on Tuesday, July 24, 2012. 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 profit of 54 cents per share, a decline of 30.8% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 56 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 54 cents during the last month. Analysts are projecting profit to rise by 9.7% compared to last year’s $1.95.

Past Earnings Performance: The company beat estimates last quarter after falling short in the prior two. In the first quarter, the company reported net income of 45 cents per share versus a mean estimate of profit of 44 cents per share. In the fourth quarter of the last fiscal year, the company missed estimates by 7 cents.

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Wall St. Revenue Expectations: Analysts predict a decline of 11% in revenue from the year-earlier quarter to $1.54 billion.

Stock Price Performance: Between July 12, 2012 and July 18, 2012, the stock price rose $1.75 (6.4%), from $27.37 to $29.12. The stock price saw one of its best stretches over the last year between November 23, 2011 and December 7, 2011, when shares rose for 10 straight days, increasing 15.5% (+$3.74) over that span. It saw one of its worst periods between May 2, 2012 and May 10, 2012 when shares fell for seven straight days, dropping 5.4% (-$1.74) over that span.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.15 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 regressed in this liquidity measure from 1.35 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 22.8% to $2.02 billion while assets rose 5.3% to $2.34 billion.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of two-straight quarters of revenue declines. Revenue fell 42.5% in the fourth quarter of the last fiscal year and dropped again in the first quarter.

The company is trying to stem some negative momentum heading into this earnings announcement. Profit has dropped by a year-over-year average of 29.4% over the past four quarters.

A Look Back: In the first quarter, profit fell 2% to $43.9 million (41 cents a share) from $44.8 million (42 cents a share) the year earlier, but exceeded analyst expectations. Revenue fell 10.6% to $1.48 billion from $1.66 billion.

Analyst Ratings: There are mostly holds on the stock with three of five analysts surveyed giving that rating.

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

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