Avery Dennison First-Quarter Results Slide Adhesive product and label maker Avery Dennison Corp., Pasadena, Calif., announced on Tuesday its first-quarter earnings fell more than 9 percent from a year ago. According to Reuters, the decline is due to the slower North American economy and weakness in some European specialty markets. Avery Dennison's net income fell 10 percent to $63.6 million compared with the same quarter last year. Sales slipped slightly to $963.2 million from $965.3 million last year. The company, whose products include battery labels, retail tags, and peel-and-stick postage stamps, said it expected to earn 68 to 72 cents per share for the second quarter, according to Reuters. Analysts on average expect Avery Dennison to earn 72 cents per share in the second quarter and $2.93 per share in 2001, according to Thomson Financial/First Call. Avery Dennison remained cautious in its full-year outlook, but said its earnings momentum may improve by the second half of the year. The projection was based on evidence that superstore closures have tapered off and on enthusiasm over upcoming back-to-school office product launches, it said. Some of the inventory tightening that began in the second quarter 2000 has played itself out, Avery Chief Executive Philip Neal told Reuters. Avery Dennison said the negative effects of currency exchange rates sliced 2 cents per share off its quarterly earnings. Excluding currency effects, it said sales grew 3 percent. Severance costs affected the company's bottom line by about 1.5 cents per share, and acquisitions added 3.5 percent to first-quarter sales figures, Avery Senior Vice President Daniel O'Bryant said. Avery completed the acquisition of Dunsirn Industries, a non-pressure-sensitive materials supplier during the quarter, while the purchase of the CD Stomper brand of CD and DVD labels boosted sales in Avery's office products segment. Avery said it is now the largest maker of customizable CD and DVD labels. Virtually all of Avery Dennison's North American businesses saw unit volume declines in the first quarter versus a year ago, Neal told Reuters. Sales from the company's pressure-sensitive adhesives and materials division, however, rose 5.8 percent to $548 million in the quarter, excluding currency effects, as strong international revenues offset mid-single-digit declines in domestic sales. Avery Dennison's consumer and converted products segment reported a 1 percent increase in sales to $452 million, excluding currency effects. The company said sales growth in the first quarter was held back by consolidation among office products superstores and the placement of several large orders from major customers in the fourth quarter 2000.