R.R. Donnelley Q4 Results Top Estimates, Provides Rosy Sales Outlook

(RTTNews) - Print and related services provider R.R. Donnelley & Sons Co. (RRD) reported Tuesday a profit for the fourth quarter compared to a hefty loss last year, which was weighed down by higher restructuring and impairment charges. Stripping down the charges, adjusted earnings per share for the quarter topped analysts' expectations, so did revenues. The company also provided sales guidance for the full-year 2014, well above Street view.

"We are pleased with the fourth-quarter organic revenue growth of 2.3%, driven by strong revenue performance across many of our offerings" President and CEO Thomas Quinlan III said in a statement.

The Chicago, Illinois-based company reported net income of $104.0 million or $0.56 per share for the fourth quarter, compared to a net loss of $849.0 million or $4.70 per share in the prior-year quarter.

The results for the year-ago quarter included $5.04 per share of restructuring and impairment charges.

Excluding items, adjusted net income for the quarter was $89.8 million or $0.49 per share, compared to $78.1 million or $0.43 per share in the year-ago quarter.

On average, three analysts polled by Thomson Reuters expected the company to report earnings of $0.38 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 3.6 percent to $2.76 billion from $2.66 billion in the same quarter last year, and topped Wall Street analysts' consensus estimate of $2.68 billion.

Organic sales grew 2.3 percent, driven by volume growth in many offerings and an increase in pass-through postage revenue.

During the latest quarter, the company realigned into four new operating segments from the earlie two segments.

Net sales for the publishing and retail services decreased 1.1 percent to $746 million and variable print net sales declined 1.9 percent to $674 million, while strategic services net sales grew 19.7 percent to $619 million from the year-ago quarter. International net sales grew 2.0 percent to $716 million from last year.

Gross margin for the quarter contracted 10 basis points to 21.9 percent from last year's 22.0 percent.

For fiscal 2013, the company reported net income of $211.2 million or $1.16 per share, compared to a net loss of $651.4 million or $3.61 per share in the prior year. Excluding one-time items, adjusted net income for the year was $309.7 million or $1.69 per share, compared to $338.3 million or $1.86 per share in the year ago. Net sales for the full year edged up 2.5 percent to $10.48 billion from $10.22 billion in the previous year.

Street was looking for full-year 2013 earnings of $1.58 per share on annual revenues of $10.41 billion.

Looking ahead to fiscal 2014, the company expects net sales in a range of $11.5 billion to $11.7 billion, Street is currently anticipating sales of $10.47 billion.

"The continuing development of our market segment solutions, combined with our recent acquisition of Consolidated Graphics, will allow us to build upon the positive trend realized in 2013. We continue to target gross leverage on a long-term sustainable basis to be in the range of 2.25x to 2.75x," Quinlan added.

RRD closed Tuesday's regular trading session at $18.78, down $0.26 or 1.37% on a volume of 2.20 million shares. However, the stock gained $1.32 or 7.03% in after-hours trading.