Avery Dennison 4Q Profit Off 81% On Prior-Year Benefit, Sales Drop

Avery Dennison Corp.'s (AVY) fourth-quarter earnings fell 81% from a year-earlier period that included a tax benefit as the maker of labels and tags also reported sales declines at its retail branding and specialty businesses.

Shares were down 5.9% at $27 in recent premarket trading as the results were worse than expected and the company projected earnings for 2012 below Wall Street's views. Through Monday's close, the stock is down roughly 32% in the past 52 weeks.

For the year, the company projected per-share earnings of $1.80 to $2.15, while analysts polled by Thomson Reuters expected $2.71.

Avery recently agreed to sell its office and consumer products business for $550 million to 3M Co. (MMM). The office and consumer space has become increasingly less important to Avery as it shifts its emphasis to other types of labels and tags.

Avery Dennison reported a profit of $22 million, or 21 cents a share, down from $114.2 million, or $1.06 a share, a year earlier. The latest period included a loss of 6 cents a share from discontinued operations, which includes its office and consumer products segment. Excluding restructuring-related costs and other items, earnings were down at 39 cents a share from 98 cents.

Revenue decreased by $8 million to $1.45 billion on sales declines at its retail branding and information solutions and other specialty converting businesses.

Analysts polled by Thomson Reuters most recently projected earnings of 46 cents a share on revenue of $1.6 billion.

Gross margin eased to 24.7% from 24.9%.

Its pressure-sensitive materials segment, the biggest contributor to the top line, reported sales growth of 1.9% though operating earnings fell 3.6% on lower margins.

The board declared an 8% increase in its first-quarter dividend to 27 cents a share.

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; [e-mail]