Avery Dennison Corp. warned Tuesday that a slower economy would cut its 2008 results, even though net income rose 7 percent in the second quarter as an acquisition bolstered sales.
The Pasadena-based adhesive label maker said net income for the quarter ended June 28 rose to $92.4 million, or 93 cents per share. Excluding one-time charges, the company had adjusted earnings per share of $1.03. That was up from $1.01 a year ago and beat the estimates of analysts polled by Thomson Financial, who expected $1.
Sales climbed 20 percent to $1.83 billion, slightly topping analysts projections of $1.8 billion. Revenue in Avery's retail information systems business doubled to $438 million, which the company credited to orders related to Paxar Corp., an Avery Dennison acquisition of a year ago.
The company now expects full-year earnings of $3.75 to $3.95 per share, excluding one-time items, which is below average Wall Street estimates of $4.03 per share. In its first quarter report the company had cut its forecast to a range of $4 to $4.30 per share.
A breakdown of second-quarter results shows the trouble spots. Revenue in Avery's office and consumer products segment fell 3 percent, with the pressure-sensitive materials segment down 11 percent to $80 million. The company has increased prices on some products, but said the benefits wouldn't be seen until later in the year.
Avery shares were down 57 cents, or 1 percent, to $44.67 in Tuesday morning trading.
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