Avery Dennison Corp. said on Tuesday that it fell to a fourth-quarter loss due to charges of $98 million related to company restructuring and divestitures.
The Pasadena-based office products and adhesive labels manufacturer reported a fourth-quarter net loss of $6.9 million (7 cents per share), compared with income of $83.6 million (83 cents) for the like period a year earlier. Revenue declined 4 percent to $1.36 billion.
Restructuring actions, discontinued operations and legal costs related to a patent lawsuit lowered fourth-quarter results. Excluding these costs, fourth-quarter adjusted net income was $92.7 million (92 cents per share).
Analysts expected earnings of 84 cents per share on revenue of $1.42 billion.
Severance and non-cash charges associated with the restructuring actions and divestitures totaled $98 million after taxes. Avery also eliminated 700 jobs.
In early December, Avery said it expected restructuring costs of between $50 million and $65 million. The across-the-board cuts were expected to save $80 million to $90 million.
The company said it anticipates additional restructuring actions in 2006, which could result in further layoffs of nearly 80 to 100 positions, with restructuring charges in the range of $10 million to $15 million during the first half of the year. These actions are expected to yield $15 million to $20 million in savings per year.
Avery expects full-year earnings in the range of $3.45 to $3.80 per share, including a 12-cent-per-share in stock option expenses. Additional restructuring charges related to pending plans could reduce 2006 earnings by 8 cents to 12 cents per share. Revenue growth from continuing operations is anticipated to be 2 percent to 3 percent.
Shares of Avery rose 3.1 percent to settle at $59.20 on Tuesday
For reprint and licensing requests for this article, CLICK HERE.