Avery Dennison outlook

Avery Dennison Corp. said in mid-March that the current range of analysts“ first quarter earnings estimates remains consistent with the company“s January projection of 60 to 65 cents a share. Avery …

Avery Dennison Corp. said in mid-March that the current range of analysts“ first quarter earnings estimates remains consistent with the company“s January projection of 60 to 65 cents a share. Avery also said it is too soon to raise expectations for the year, even though it remains comfortable with analysts“ first quarter guidance. A current Thomson Financial/First Call survey of eight analysts produced a mean first quarter earnings forecast of 64 cents a share for Avery, which earned 65 cents a share in the year-ago period. In a press release on 18 March, Avery said margin expansion will play a key role in profitability improvement during the near term. It expects to see the benefit of many cost-reduction actions already implemented, as well as results from ongoing productivity improvement programmes. Avery added it has seen orders across its business strengthen in the US recently, while conditions in Europe are expected to remain slow. In January, Avery expected 2002 earnings of US$ 2.50 to US$ 2.70 a share, excluding the impact of a change in goodwill accounting and its pending acquisition of Jackstadt Gmbh. The estimate assumed top-line growth for office products and “more economically-sensitive businesses” later in the year. A current First Call survey of eight analysts produced a mean 2002 earnings estimate of US$ 2.69 a share for Avery, which earned US$ 2.47 a share in 2001. Avery continues to target earnings growth of more than 10% for the long-term, with margin expansion driving a relatively larger share of the growth during the next two or three years. The company expects this weighting to shift to top-line growth over time, as sales from new ventures gain momentum. Avery said its business fundamentals are “stronger than ever.” The company said it has either maintained or increased market share positions in all core businesses, expanded global presence and strengthened competitive advantage, while continuously improving cost structure. The label and stamp maker anticipates margins to grow as a result of a product mix shift to include new, higher margin market categories and businesses.