R.R. Donnelley’s Earnings Double

Third quarter profits down due to volume declines, ‘price pressures.’

By Jason Fell
11/05/2008

Printer R.R. Donnelley Wednesday reported $168.2 million in third quarter net earnings, down roughly 4 percent from $175 million during the same period last year. Through the first nine months, however, net earnings were up more than 100 percent to $497 million.

Year-to-date, Donnelley generated $8.7 billion in net sales, up slightly from roughly $8.5 billion during the same period last year. Net sales during the third quarter were $2.9 billion, down 1.6 percent from the same period in 2007. The decrease was caused, the company said, by volume declines and “continued price pressure primarily due to the global economic slowdown.”

In Donnelley’s U.S. segment, net sales decreased 0.8 percent to $2.1 billion. The company attributed the dip to volume declines across product lines and continued price pressures. During the quarter, the segment also saw a $16.7 million restructuring and impairment charge.

The declines were offset, in part, by Donnelley’s acquisitions of Cardinal Brands in December 2007 and Pro Line Printing in March 2008, the company said.

"Given these unprecedented times, we are pleased with the earnings generated in the quarter," president and CEO Thomas J. Quinlan III said in a statement.

In July, Donnelley said it finalized a multi-year agreement with F+W Media worth more than $80 million, including several of F+W’s magazine and book products.