DOW JONES NEWSWIRES
R.R. Donnelley & Sons Co.'s (RRD) first-quarter profit
soared following charges last year while revenue fell slightly
excluding currency changes as price pressures continue.
Results edged analysts' expectations, and President and Chief
Executive Thomas J. Quinlan III said, "The benefits of our diverse
product offerings and the actions taken to improve our cost
structure have driven our higher operating margins."
The printing-services company has grown through acquisitions,
buying up smaller companies for at least a decade in a move to
increase efficiency and broaden its portfolio, but it increased
debt to do so. It has a $481 million deal pending to buy Bowne
& Co. (BNE).
Donnelley has struggled as publishers cut back on print runs for
magazines, catalogs and books, moved business to the Internet or
eliminated titles completely. Overcapacity has been another
problem, keeping prices low and competition intense.
The company reported a profit of $52.6 million, or 25 cents a
share, up from $13.9 million, or 7 cents a share, a year earlier.
Excluding restructuring charges and write-downs, earnings rose to
33 cents from 24 cents. Revenue increased 1.6% to $2.42 billion,
but fell 3.6% excluding currency fluctuations.
Analysts polled by Thomson Reuters expected earnings of 30 cents
and $2.41 billion in sales.
Operating margin rose to 6% from 3.6%.
U.S. sales, the company's primary focus, fell 3.7% amid lower
paper sales and price declines. International revenue grew 5.5%; it
would have falling 3.5% absent currency changes.
R.R. Donnelley shares closed at $21.02 Tuesday and were inactive
premarket. The stock has risen 66% in the past year.
-By Jodi Xu, Dow Jones Newswires; 212-416-3037;
jodi.xu@dowjones.com