Avery Dennison tops analysts’ estimates for earnings and revenue in Q2

Avery Dennison (NYSE: AVY) published its quarterly financial results on Monday that came in stronger than what the experts had forecast. Albertsons also said that its quarterly revenue jumped 21.8% on Monday.

Shares of the company tanked about 5% on market open on Monday. At £88.88 per share, Avery Dennison is currently more than 10% lower year to date in the stock market after recovering from an even lower £61.11 per share in March.

Avery Dennison’s Q2 financial results versus analysts’ estimates

Analysts had anticipated the company to print £1.71 billion in revenue in the second quarter. In terms of earnings per share (EPS), their estimate was capped at 86 pence. In its report on Monday, Avery Dennison topped both estimates posting a higher £1.19 billion in revenue and 99 pence of earnings per share in Q2.

For the third quarter, the American multinational manufacturer and distributor said that it now expects its sales to see a 5% to a 7% decline on a constant currency basis. In terms of organic sales, Avery Dennison forecasts a 7% to a 9% decline in the third quarter.

On a year over year basis, the Glendale-based firm saw a 26% decline in net income and a 14.9% decline in net sales in the second quarter. The decline in sales was relatively lower at 12% on constant currencies. Its organic sales, on the other hand, were reported 13.7% lower on an annualised basis.

Avery Dennison boasted to have concluded the second quarter with £201.75 million in cash and investment securities. It also has access to an additional £620.76 million under its revolving credit line. For 2020, the company has a target for delivering roughly £388 million of free cash flow. Learn more about investment securities.

The company also highlighted in its report on Monday that for net temporary savings, it is targeting about £117 million in 2020.

Other prominent figures in Avery Dennison’s earnings report

Other prominent figures in Avery Dennison’s earnings report on Monday include a 29.5% year over year decline in sales from retail branding and information solutions, and a 22.8% decline in sales from industrial and healthcare materials in the fiscal second quarter.

Avery Dennison’s performance in the stock market was also reported upbeat last year with an annual gain of more than 40%. At the time of writing, the U.S. company is currently valued at £7.41 billion and has a price to earnings ratio of 16.59.