R. R. Donnelley & Sons Co. (
recently announced that it has secured a multi-year contract from
International Airlines Group ("IAG"), the parent body of British
Airways, Iberia and Avios. However, the details of the
transaction were not disclosed. Per the contract, Donnelley will
mainly provide print management, direct response, warehousing,
and logistics services.
Over the past 12 months, important contract wins have ensured
significant growth for Donnelley. Donnelley won a number of
multi-year multi-million dollar contracts from the likes of
Guidepost, Parke-Bell Ltd. and
Office Depot (
. Donnelley also won a multi-year contract from Canada-based
Scotiabank, which expands the company's presence in North
We believe that the new contract wins bode well for Donnelley,
as they reflect its superior technology and growing reputation.
Other than the multi-year contracts, Donnelley's growth has also
been driven by accretive acquisitions. In 2012, Donnelley
acquired Presort Solutions, Meisel Photographic, Express Postal
Options International and Edgar Online.
Currently, Donnelley is facing significant threat from digital
technologies that enable much easier transfer, designing,
resetting and reproduction of data. This affects big projects,
such as books and journals, where the number of printed pages are
Additionally, with publishers coming out with digital versions
of books and sophisticated e-book readers from
Amazon.com Inc. (
Barnes & Noble Inc. (
for reading these books becoming increasingly available, the
interest in commercially printed paperbacks and hard covers is
Donnelley needs to expand its scope beyond this traditional
business and acquisitions are likely to take it in that
direction. We believe that Donnelley will achieve growth in
fiscal 2013 due to its innovative product pipeline. Donnelley
plans to introduce near field communication ("NFC") tags during
the year, which will boost top-line growth going forward.
Moreover, an improving macro-economic condition in the
domestic market and cost cutting initiatives will boost
profitability in the near term. Donnelley's improving liquidity
position is also a positive catalyst in our view.
Currently, Donnelley has a Zacks Rank #2 (Buy).
AMAZON.COM INC (AMZN): Free Stock Analysis
BARNES & NOBLE (BKS): Free Stock Analysis
OFFICE DEPOT (ODP): Free Stock Analysis
DONNELLEY (RR) (RRD): Free Stock Analysis
To read this article on Zacks.com click here.