A slimmer Avery Dennison Corp. on Wednesday announced fiscal first quarter results that were in line with Wall Street expectations for profit, as the company begins to benefit from its restructuring.
The Glendale label maker reported net income of $71.2 million (65 cents a share) for the quarter ended March 29, compared to $57.8 million (59 cents) for the same period last year. Revenue rose about 3 percent to $1.55 billion.
The company’s net income barely missed analysts’ average per-share estimate of 66 cents, while revenue also was slightly below the expected $1.57 billion, according to Thomson Financial.
Chief Executive Dean Scarborough said he was pleased with the quarterly results, especially as it related to the firms strongest segment.
The company’s core business – pressure-sensitive, self-adhesive labels used on a wide range of consumer products and reflective highway signs – reported a rise in sales to more than $1.14 billion.
“Sales were up nearly 5 percent on an organic basis, driven by strong volume growth in Pressure-Sensitive Materials. Retail Branding and Information Solutions delivered another quarter of strong earnings growth, reflecting the successful execution of productivity initiatives across the business,” Scarborough said in a prepared statement.
As demand for paper office products has shrunk amid the digitization of the work environment, Avery Dennison sold its office products and engineered-solutions divisions last July to CCL Industries Inc. of Toronto, a printing and label company, for an estimated $400 million. It also moved from Pasadena to smaller corporate offices in Glendale early this year.
As a result of the restructuring, the company said it recorded about $10 million in savings and incurred restructuring costs of about $7 million. The company expects to incur cash restructuring costs of $45 million this year.
The company repurchased 1.2 million shares in the first quarter at a cost of $59 million.
Shares closed down $2.30, or 4.4 percent, to $49.46 on the New York Stock Exchange.
Cheesecake Factory Inc. said Wednesday that same-store sales rose at most of its outlets during the fiscal first quarter but poor weather cut into profits, which did not meet Wall Street forecasts.
The Calabasas operator of casual dining restaurants reported net income of $22.5 million (43 cents a share) in the quarter ended April 1, compared to $25.3 million (48 cents) in the same period a year earlier. Revenue rose about 4 percent to $481 million.
Analysts on average expected net income of 49 cents on revenue of about $478 million, according to Thomson Financial Network.