Avery Dennison Cuts Forecast
Jun 24, 2003
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Avery Dennison Corp.,, one of the world's largest makers of adhesive labels, cut its quarterly profit outlook because of disappointing sales and higher-than-expected costs. Avery Dennison said it now expects a second-quarter profit of U.S. $0.68 to $0.72 a share, down from its prior outlook of $0.77 to $0.82. The company estimated second-quarter revenue of $1.2 billion to $1.23 billion, up 14 percent to 16 percent from a year earlier. Currency changes are responsible for about half of that growth, it said. Slightly more than half of the profit shortfall results from a sales slump, with weakness spread across the company's various geographic and end markets. Avery Dennison said the remainder of the shortfall comes from higher-than-expected costs for integrating its November acquisition of RVL Packaging Inc., legal expenses tied to a U.S. Justice Department criminal investigation into pricing in the label stock industry, and bad debt. The company said orders, which were weak in April and May, have improved in the last 2 weeks, but it is too early to predict whether its overall business is now on track. (Reuters)

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