Avery Dennison reported adjusted earnings of $0.80 per share in the
second quarter of 2014, up 12.7% year over year. The results beat
the Zacks Consensus Estimate by a penny. Avery raised its full-year
2014 outlook for adjusted earnings per share from the range to
$3.00 $3.10. The company expects to incur cash restructuring costs
of $50 million in 2014. Avery will continue to benefit from product
introductions and growth in emerging markets. However, inflationary
raw materials costs and the loss-making medical business remain
concerns. Thus, we reiterate our Neutral recommendation on Avery
Dennison with a target price of $52.
Headquartered in Pasadena, California, Avery Dennison
Corporation (AVY) produces pressure-sensitive materials, and a
variety of tickets, tags, labels and other converted products.
Avery operates over 180 manufacturing and distribution facilities
in more than 60 countries. Its products are sold under the Avery,
Avery Dennison, Avery Graphics and Fasson brands. Its clientele is
spread across the U.S., Europe, Asia, Latin America and other
regions. Avery runs three major business units:
The Pressure-Sensitive Materials unit (PSM) (74% of total
revenue in the first quarter of 2014) primarily manufactures and
sells pressure-sensitive roll materials, graphics and reflective
materials, and water and solvent-based performance polymer
adhesives and engineered films.
The Retail Branding and Information Solutions (RBIS) unit (25%)
provides a wide variety of information and brand management
solutions for apparel manufacturers, retailers, distributors and
industrial customers on a worldwide basis, including tag and label
design and printing, heat transfers, patches and specialty trim,
eco-friendly solutions, packaging and security solutions, RFID
(radio-frequency identification) solutions, supply chain solutions
and Web services as well as barcode printers, software solutions,
molded plastic fasteners and application devices.
Vancive Medical Technologies unit (1%) is a producer of medical
products and solutions. This business manufactures a wide range of
pressure-sensitive adhesive products for surgical, wound care,
ostomy and electromedical applications. These products are sold
primarily to medical supply and device manufacturers and healthcare
Avery Dennison Corporation (AVY): Read the Full
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