Earnings Fall at R.R. Donnelley

The company beats estimates on an adjusted basis.
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Earnings fell 10% from a year ago in

R.R. Donnelley's

(RRD) - Get Report

third quarter due to a loss related to the sale of its Peak Technologies unit. On a continuing operations basis, earnings rose 9% from a year ago.

The printing company earned $102.1 million, or 47 cents a share, in the quarter, compared with $112.8 million, or 51 cents a share, a year ago. Backing out restructuring and other expenses, the company earned $134.1 million, or 62 cents a share, from continuing operations in the latest quarter, beating estimates by 4 cents.

Sales rose 14% from a year ago to $2.18 billion, beating estimates by about $100 million.

"The increase was primarily due to new customer wins and increased volume with existing customers in the Publishing and Retail Services and Integrated Print Communications segments, and the acquisition of the Astron Group and Asia Printers Group," Donnelley said.

"The gross margin (exclusive of depreciation and amortization) in the quarter decreased to 28.4% in the third quarter of 2005 from 29.0% in the third quarter of 2004, reflecting continued industry-wide pricing pressure and higher year-over-year paper prices, offset in part by benefits from cost reduction actions and procurement savings," it said.

The company added the third-quarter's 4-cent upside to its full-year estimate and said it expects to earn $2.21 a share this year.