* Q1 adj EPS $0.11 vs est $0.22
* Rev down 13 pct
* Shares fall as much as 8 pct (Recasts; adds details, analyst comment, updates share movement)
April 28 (Reuters) - Label and office supplies maker Avery Dennison Corp (AVY.N) posted lower-than-expected quarterly profit as sales across all its segments fell, sending its shares down as much as 8 percent.
“Business conditions remain weak, particularly in the retail sector,” Chief Executive Dean Scarborough said in a statement.
Avery Dennison, which began a restructuring program in the fourth quarter and cut 10 percent of its global workforce, said it expects to incur about $130 million of cash restructuring charges, with the majority to be recorded in 2009.
The company is targeting more than $150 million in annualized savings over the next two years.
“Avery Dennison was among the earliest stocks to enter recession, and we believe will be among the first to recover,” analyst John Roberts of Buckingham Research Group wrote in a note to clients. The analyst raised his price target on the stock to $34 from $28.
For the first quarter, the company reported a net loss of $46.2 million, or 46 cents a share, compared with net income of $68.4 million, or 69 cents a share, a year earlier.
On an adjusted basis, it earned 11 cents a share.
Revenue at the company, which makes self-adhesive labels and other products used by retailers, auto suppliers and a host of other industries, fell 13 percent to $1.43 billion.
Analysts on average were expecting earnings of 22 cents a share, before special items, on revenue of $1.42 billion, according to Reuters Estimates.
Sales at the retail information services segment were down 15 percent at $316.0 million, reflecting continued weakness of the retail apparel market in the United States and Europe.
Sales at the pressure-sensitive materials (PSM) segment, which makes adhesives and base materials including Fasson-brand papers, films, foils, graphic and reflective films, fell 12 percent to $808.8 million.
“In spite of broad volume declines, prices were modestly higher in pressure-sensitive materials,” analyst Roberts said. “We view that as indicative of stable market shares.”
While results were “ugly,” Avery Dennison’s competitive position remains strong, and cash flow and balance sheet are strong enough to weather the downturn, he added.
Shares of the Pasadena, California-based company were trading down $1.46 at $27.99 Tuesday afternoon on the New York Stock Exchange. They touched a low of $27.09 earlier in the session. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Aradhana Aravindan and Anne Pallivathuckal)