(RTTNews) - Avery Dennison Corp. (AVY) said the company currently expects sales and earnings to decline in 2020 on lower demand, with the second quarter representing the trough. In the third quarter, the company projects a decline in sales before the impact of currency translation in the range of 5 percent to 7 percent, or 7 percent to 9 percent on an organic basis.
Second quarter adjusted net income was $1.27 per share, down 26 percent, above the company's expectations. Net sales were $1.53 billion, down 14.9 percent. Sales were down 12.0 percent excluding currency, and down 13.7% on an organic basis.
Avery Dennison has started cost control and cash management actions to partially offset the decline in demand. The company is targeting to deliver free cash flow of approximately $500 million in 2020.
Avery Dennison expects incremental savings from restructuring actions, net of transition costs, of $60 million to $70 million during 2020, and anticipates carryover savings, net of transition costs, of approximately $70 million in 2021, up approximately $10 million since the April outlook for both years. Also, the company is targeting net temporary savings of approximately $150 million in 2020.
The company currently has $800 million available under its revolving credit facility, and approximately $260 million in cash and cash equivalents on hand at quarter-end.
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