What's In The Cards For Avery Dennison (AVY) In Q1 Earnings?
Zacks Investment Research | Apr 19, 2018 09:20PM ET
Let’s take a look at how things are shaping up prior to this announcement.
Factors at Play
Avery Dennison’s Label and Graphic Materials segment is the largest and highest-return business. The segment will maintain its momentum of strong top-line growth and continued margin expansion, aided by growth in emerging markets, company’s strategic focus on high-value categories (including specialty labels) as well as the ongoing contribution from productivity initiatives.
The Retail Branding and Information Solutions segment continues to perform well on the back of business model transformation. This has enabled it to gain share market share, while driving significant margin expansion. Avery Dennison has increased the segment’s competitiveness through strategic pricing initiatives. Margins are likely to improve exhibiting the benefits of productivity initiatives and higher volume. Growing adoption of RFID (Radio-frequency identification) by retailers due to growth of omni-channel retailing as well as the requirement to locate inventories at all times is fueling demand. Consequently, RFID sales, which increased a 20% year over year in 2017, will continue to boost the segment’s sales in the to-be-reported quarter as well.
However, the Industrial and Healthcare Materials segment’s operating margins are currently bearing the brunt of acquisitions and growth-related investments as well as a number of operational challenges. Further, modest sequential raw material inflation will hinder Avery Dennison’s first-quarter performance. Further, higher-debt levels following the Yongle and Finesse acquisitions remain a concern.
Nevertheless, the Zacks Consensus Estimate for the first quarter is currently pegged at $1.34, reflecting year-over-year growth of 20.7%. The estimate for revenues is pegged at $1.76 billion, projecting a year-over-year climb of 11.7%. Focus on productivity, acquisitions, aggressive cost control and share repurchases will drive the results.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.