In order to focus on cost-effective products for healthcare
Avery Dennison Corporation
) has renamed and repositioned its medical solutions group as
"Vancive Medical Technologies". The innovative and cost effective
medical solutions of the new group will be available to both
service providers and patients.
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The new brand, which replaces "Avery Dennison Medical Solutions",
will offer several innovative products including Metria,
Intelishielda and BeneHold that enable patients as well as
physicians to make smarter health decisions. Avery expects
Vancive to continue to deliver medical products meeting people's
Avery is restructuring its facilities to reduce costs and deliver
double-digit earnings growth and higher returns. The company
targets to achieve more than $100 million in annualized savings
Avery expects annualized savings from its restructuring actions
to be nearly $20 million in 2012. It continues to examine further
opportunities to reduce costs, including additional restructuring
Avery's adjusted earnings improved 77% year over year to 53 cents
per share in third-quarter 2012, beating the Zacks Consensus
Estimate of 45 cents. Total revenues dipped 0.8% to $1.488
billion but were ahead of the Zacks Consensus Estimate of $1.487
Avery has a good exposure to Europe, generating a third of its
total revenues from the region. However, dearth of demand in
Europe given the weak economic conditions may pressure its
revenues moving ahead.
Moreover, rising raw material costs will put pressure on the
margins. In addition, the restructuring activities being capital
intensive will further pressure margins moving ahead.
Based in Pasadena, California, Avery produces pressure-sensitive
materials, office products and a variety of tickets, tags, labels
and other converted products. It has over 200 manufacturing
operations and distribution facilities in more than 60 countries.
The company's products are sold under the Avery, Avery Dennison,
Avery Graphics and Fasson brands.
Avery faces competition from
Bemis Company, Inc.
). The company retains a short-term Zacks #2 Rank (Buy). We have
a long-term Underperform recommendation on the stock.