RR Donnelley 2Q Earnings Slide 86% On Restructuring Costs

R.R. Donnelley & Sons Co.'s (RRD) second-quarter earnings tumbled 86% as the commercial printer saw one-time restructuring charges and higher expenses hit its bottom line, masking revenue growth in the print and international segments.

During the second quarter, all three major credit rating firms lowered R.R. Donnelley's credit rating into junk territory, citing challenging growth prospects and a $1 billion stock repurchase program, among other concerns.

The company reported a profit of $12.2 million, or 6 cents a share, down from $88.8 million, or 42 cents a share, a year earlier. Excluding items such as restructuring costs, earnings rose to 53 cents from 47 cents a year earlier.

Revenue improved 8.9% to $2.62 billion, helped by a recent acquisition. Analysts polled by Thomson Reuters expected earnings of 52 cents a share on revenue of $2.66 billion.

Operating margin fell to 4.4% from 7.3% as operating costs jumped 12%.

Sales in the U.S. print and related services segment, the company's primary focus, rose 6.2% as volume increases in commercial, logistics and financial print partially offset volume declines in books and directories. Net sales in the company's international segment climbed 17%.

Shares closed at $17.89 Tuesday and were inactive premarket. Through the latest close, the stock has risen 2.4% since the start of the year.

 
   -By Mia Lamar, Dow Jones Newswires; 212-416-3207; [e-mail]