R.R. Donnelley & Sons Co.'s (RRD) second-quarter earnings
tumbled 86% as the commercial printer saw one-time restructuring
charges and higher expenses hit its bottom line, masking revenue
growth in the print and international segments.
During the second quarter, all three major credit rating firms
lowered R.R. Donnelley's credit rating into junk territory, citing
challenging growth prospects and a $1 billion stock repurchase
program, among other concerns.
The company reported a profit of $12.2 million, or 6 cents a
share, down from $88.8 million, or 42 cents a share, a year
earlier. Excluding items such as restructuring costs, earnings rose
to 53 cents from 47 cents a year earlier.
Revenue improved 8.9% to $2.62 billion, helped by a recent
acquisition. Analysts polled by Thomson Reuters expected earnings
of 52 cents a share on revenue of $2.66 billion.
Operating margin fell to 4.4% from 7.3% as operating costs
jumped 12%.
Sales in the U.S. print and related services segment, the
company's primary focus, rose 6.2% as volume increases in
commercial, logistics and financial print partially offset volume
declines in books and directories. Net sales in the company's
international segment climbed 17%.
Shares closed at $17.89 Tuesday and were inactive premarket.
Through the latest close, the stock has risen 2.4% since the start
of the year.
-By Mia Lamar, Dow Jones Newswires; 212-416-3207; mia.lamar@dowjones.com