Avery Dennison Corporation (NYSE:AVY) rose 1.63% in premarket trading on Wednesday after the materials science company reported third-quarter earnings that exceeded expectations, highlighting its ability to adapt in what it described as a “dynamic environment.”
The company posted adjusted earnings per share of $2.37, topping the analyst consensus of $2.33. Revenue came in at $2.22 billion, matching forecasts and rising 1.5% from the same quarter last year. On an organic basis, sales were flat year-over-year.
“We delivered a solid third quarter, with earnings above expectations in a continued dynamic environment, reflecting the strength and durability of our overall portfolio,” said Deon Stander, president and CEO.
The Materials Group generated $1.5 billion in revenue, up 1.2%, though organic sales slipped 1.9% as modest volume gains were offset by deflation-related price adjustments. The segment’s adjusted operating margin expanded to 15.2%, a 40-basis-point improvement from the prior year.
The Solutions Group posted $700 million in sales, a 2% increase with 3.6% organic growth. High-value categories such as Intelligent Labels continued to show strong momentum with high single-digit gains. However, adjusted operating margin fell 130 basis points to 10%.
For the fourth quarter, Avery Dennison forecast adjusted EPS between $2.35 and $2.45, compared with analyst expectations of $2.44.
Year-to-date through the third quarter, the company has returned $670 million to shareholders through share buybacks and dividends. In October, it also finalized the $390 million acquisition of Taylor Adhesives, a U.S.-based flooring adhesives business, as part of its growth strategy.