Avery Dennison Corporation (AVY) delivered a mixed bag in its third-quarter earnings report, exceeding profit expectations but falling short on revenue.
The company reported adjusted earnings per share of $2.33, surpassing the analyst consensus of $2.32. However, quarterly revenues came in at $2.18 billion, missing the analyst consensus of $2.20 billion.
Despite the revenue shortfall, Avery Dennison saw strong performance across its core segments. In the Materials Group, reported sales increased by 3% to $1.5 billion, with an operating margin of 14.5% and an adjusted EBITDA margin of 17.0%, on par with the prior year. The Solutions Group also reported strong growth, with sales rising by 7% to $686 million. This segment achieved an operating margin of 9.7% and an adjusted EBITDA margin of 17.9%, representing a 150 basis point increase.
The company’s financial health remains solid. Avery Dennison returned $315 million in cash to shareholders through dividends and share repurchases during the first three quarters of the year. The company’s balance sheet is strong, with a net debt to adjusted EBITDA ratio of 2.1x at the end of the third quarter.
Looking ahead, Avery Dennison has revised its guidance for 2024 reported earnings per share. The company expects earnings per share to be between $8.75 and $8.90, compared to its previous guidance range of $8.75 to $8.95. Excluding an estimated 60 cents per share impact of restructuring charges and other items, the company raised its guidance range for 2024 for adjusted earnings per share from $9.30 – $9.50 to $9.35 – $9.50 (analyst estimate: $9.43).
Following the release, AVY shares were trading lower by 1.89% at $208.39 during Wednesday’s trading session.