Avery Dennison profit falls, sales nearly flat

Avery Dennison Corp., which makes labels and packaging materials, said Tuesday that its fourth-quarter earnings plunged 81 percent on nearly flat sales and it provided an outlook for 2012 that was well below Wall Street expectations.

Avery Dennison had previously lowered its fourth-quarter outlook in October after third-quarter profit fell 22 percent on weak demand for its office products.

The Pasadena company announced this month that it would sell its office and consumer products operations to 3M Co. for $550 million in cash. The business includes labels, binders and the Hi-Liters and Marks-A-Lot pen brands.

Avery Dennison will focus on pressure-sensitive packaging materials and retail-branding products, but the retail segment sales declined in the fourth quarter on weak demand in the U.S. and Europe because of cautious consumer spending.

Net income fell to $22.2 million, or 21 cents per share, in the three months ended Dec. 31 compared with $114.2 million, or $1.06 per share, a year earlier.

Excluding restructuring costs and other special items, the company said it would have earned 39 cents per share.

Revenue was $1.45 billion, down slightly from $1.46 billion a year earlier.

Analysts expected earnings of 46 cents per share on revenue of $1.59 billion, according to FactSet.

The company forecast full-year earnings, excluding restructuring costs, of $1.80 to $2.15 per share this year. Analysts were expecting $2.69 per share.

Separately, the company said it would raise the quarterly dividend 8 percent, to 27 cents per share from 25 cents. It will be payable March 21 to shareholders as of March 7.

Avery Dennison shares dropped $1.83, or 6.4 percent, to $26.87 in morning trading Tuesday. Its shares have recovered from a 52-week low of $23.52 in early October, but are well below their high for the past year of $43.52 in late April.