Avery Dennison Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Avery Dennison (NYSE:AVY) will unveil its latest earnings on Wednesday, October 24, 2012. Avery Dennison is a global manufacturer of pressure-sensitive materials, office products, and a variety of paper products. It provides businesses and consumers with identification solutions and converted products, such as tickets, tags, and labels. .

Avery Dennison Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 45 cents per share, a decline of 6.2% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 48 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 45 cents during the last month. For the year, analysts are projecting profit of $1.94 per share, a decline of 10.2% from last year.

Past Earnings Performance: The company is looking to top estimates for the third straight quarter. Last quarter, it reported net income of 56 cents per share against a mean estimate of profit of 54 cents, and the quarter before, the company exceeded forecasts by one cent with net income of 45 cents versus a mean estimate of profit of 44 cents.

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Wall St. Revenue Expectations: Analysts are projecting a decline of 12.9% in revenue from the year-earlier quarter to $1.48 billion.

A Look Back: In the second quarter, profit fell 12.4% to $64.2 million (62 cents a share) from $73.3 million (69 cents a share) the year earlier, but exceeded analyst expectations. Revenue fell 11.2% to $1.53 billion from $1.73 billion.

Stock Price Performance: Between October 12, 2012 and October 18, 2012, the stock price rose $1.29 (4.4%), from $29.55 to $30.84. The stock price saw one of its best stretches over the last year between November 23, 2011 and December 7, 2011, when shares rose for 10 straight days, increasing 15.5% (+$3.74) over that span. It saw one of its worst periods between October 1, 2012 and October 10, 2012 when shares fell for eight straight days, dropping 6.3% (-$2.01) over that span.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of three-straight quarters of revenue declines. Revenue fell 42.5% in the fourth quarter of the last fiscal year and 10.6% in first quarter before falling again in the second quarter.

Heading into this earnings announcement, net income has dropped 29.4% on average for the last four quarters.

Analyst Ratings: With three analysts rating the stock as a buy, one rating it as a sell and two rating it as a hold, there are indications of a bullish outlook.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.13 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.15 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 4.9% to $2.12 billion while assets rose 2.8% to $2.4 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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