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R.R. Donnelley Jumps on Revenue Guidance, Earnings Beat

Commercial printer R.R. Donnelley was higher after it reported encouraging revenue guidance. The  company also cut costs and secured new business.

R.R. Donnelley & Sons  (RRD) - Get R.R. Donnelley & Sons Company Report soared Wednesday after the commercial printing company offered encouraging revenue guidance, while beating Wall Street's fourth-quarter earnings forecasts.

Shares of the Chicago company at last check were 32% higher at $3.16.

Net sales in the first quarter are expected to range from $1.1 billion to $1.15 billion, down 5% to 10% excluding acquisitions, the company said. The FactSet consensus estimate of analysts is sales of $1.1 billion.

And R.R. Donnelley estimated net sales for 2021 would be flat to up low-single digits percent. The FactSet consensus calls for revenue of $4.3 billion.

For the fourth quarter, R.R. Donnelley's net income jumped to $33.4 million, or 46 cents a share, from $3.6 million, or 6 cents, in the year-earlier period.

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The latest adjusted earnings came to 71 cents a share, while analysts surveyed by FactSet were expecting earnings of 21 cents.

Net sales totaled $1.35 billion, down 5.6% from a year earlier. Analysts were expecting sales of $1.6 billion. 

The decline includes a $24.5 million impact from business dispositions, primarily the European statements business sold in the fourth quarter of 2019. The drop also reflects lower sales as a result of the COVID-19 pandemic. And R.R. Donnelley cited an $11.5 million increase due to changes in foreign-exchange rates.

"For the second consecutive year, we achieved full year growth in adjusted income from operations and increased operating margins by lowering our cost structure, expanding client relationships, and securing new business," Dan Knotts, president and chief executive, said in a statement.

The company said it was unable to provide typical guidance for the year, as COVID-19 infection rates remain high in many parts of the world.