Factors Setting The Tone For Avery Dennison (AVY) Q4 Earnings
Zacks Investment Research | Jan 22, 2020 08:50PM ET
Avery Dennison Corporation (NYSE:AVY) is scheduled to report fourth-quarter 2019 results before the opening bell on Jan 29.
Which Way are the Estimates Headed?
The Zacks Consensus Estimate for the December-end quarter’s earnings per share is pegged at $1.68, indicating year-over-year growth of around 10.5%. The Zacks Consensus Estimate for total sales of $1.78 billion represents year-over-year increase of 0.8%.
A Sneak Peak into Q3 Performance
In the last reported quarter, Avery Dennison’s earnings and revenues surpassed the Zacks Consensus Estimate and improved year over year. The company outpaced the Zacks Consensus Estimate in all of the trailing four quarters, the average positive beat being 2.21%.
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
The company is likely to have benefited from acquisitions, organic growth and strong demand in emerging markets during the October-December period. Further, Avery Dennison’s pricing actions, restructuring activities and execution of strategies are anticipated to have significantly boosted savings, in turn, bolstering earnings during this period.
The company’s Industrial and Healthcare Materials (IHM) segment continues to drive commercial execution, while also benefiting from the Yongle, Finesse and Mactac acquisitions. The Zacks Consensus Estimate for the segment’s quarterly sales is pinned at $179 million, projecting a year-on-year rise of 2.3%. The segment’s income is estimated to be up 6.5%, year on year, to $19.2 million.
The Zacks Consensus Estimate for the Label and Graphic Materials (LGM) segment’s sales is pinned at $1,192 million for the quarter, calling for year-over-year growth of 0.8%. The segment continues to benefit from growth in emerging markets, focus on high-value categories led by specialty labels, as well as contributions from productivity initiatives. These factors are anticipated to have been conducive to the company’s top-line growth and margins during the December-end quarter. Furthermore, Avery Dennison’s completion of restructuring actions associated with the consolidation of the European footprint of its LGM segment are likely to have driven higher returns for the segment during the period under consideration. The Zacks Consensus Estimate for the segment’s income is $158 million, indicating year-over-year growth of 5.3%.
The Zacks Consensus Estimate for the Retail Branding and Information Solutions segment’s fourth-quarter sales is $425 million, suggesting 3.2% improvement from the prior-year quarter's $412 million. The Zacks Consensus Estimate for the segment’s income is pegged at $53 million, suggesting 10.4% year-over-year growth. This apart, Avery Dennison is likely to have benefited from its faster-growing high-value product categories, such as specialty labels and Radio-frequency identification (RFID).
Avery Dennison Corporation Price and EPS Surprise
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