R.R. Donnelley & Sons Co. (RRD) third-quarter earnings
plunged 92% amid big charges, but the Chicago printing-services
company profit excluding such impacts beat analysts'
expectations.
"Although demand in most of the end-markets we serve remains
challenged by economic conditions, we saw continued stabilization
and achieved modest sequential revenue growth over the second
quarter," said Chief Executive Thomas J. Quinlan III. "We expect a
sequential revenue growth rate in the low-single digits in the
fourth quarter.
The company 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. R.R. Donnelley
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.
The company said Wednesday that it has reduced its debt load by
nearly $1 billion over the past year.
Meanwhile, R.R. Donnelley posted a profit of $13.1 million, or 6
cents a share, from $168.2 million, or 80 cents a share, a year
earlier. Excluding charges such as for restructuring and debt
extinguishment, earnings fell to 54 cents from 87 cents. Analysts
polled by Thomson Reuters predicted 46 cents.
Revenue decreased 14% to $2.46 billion, helping push gross
margin down to 25.2% from 27%.
U.S. sales, the company's primary focus, dropped 15%, while
international revenue shrank 12%.
R.R. Donnelley shares closed at $20.75 Tuesday and weren't
active premarket. The stock, which has more than tripled from an
all-time low in March, is up 53% for 2009.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com