CHICAGO, Jan. 30 -- R.R. Donnelley & Sons Company today announced fourth quarter 2002 earnings per diluted share of 42 cents, compared to a loss of 33 cents in the year ago period. Revenues for the fourth quarter were $1.3 billion, down 6 percent from the prior year. Net income was $48 million, compared to a net loss of $38 million in the fourth quarter of 2001. Included in the above results for the fourth quarter are restructuring and impairment charges of $24 million ($14 million after-tax, or 13 cents per diluted share). In the year-earlier period, results included restructuring and impairment charges of $102 million ($79 million after-tax, or 69 cents per diluted share). "We had an excellent quarter to close out a challenging year," said William L. Davis, R.R. Donnelley's chairman, president and chief executive officer. "Our two-year effort to dramatically reduce our cost structure is paying off, as is our continued focus on productivity improvements." The company noted that during the fourth quarter it reached its target on its two-year cost reduction efforts, eliminating $175 million on an annualized basis compared to 2000 costs. The majority of those savings came from formal restructuring programs implemented by the company during 2001 and 2002. In addition to the company's cost reduction efforts, productivity improvements also contributed to the year-over-year increase in earnings in the fourth quarter, despite the revenue decline. For the full year 2002, the company reported earnings per diluted share of $1.24, compared to $0.21 for the full year 2001. Revenues in 2002 were $4.8 billion, down from $5.3 billion in 2001. Net income in 2002 was $142 million, compared to $25 million for the prior year. Included in the above results for the full year 2002 are restructuring and impairment charges of $89 million ($54 million after-tax, or 47 cents per diluted share), and the reversal of excess tax reserves ($30 million after-tax, or 26 cents per diluted share) related to the company's settlement with the Internal Revenue Service on the deductibility of interest payments for corporate-owned life insurance. In the prior year, results include restructuring and impairment charges of $196 million ($137 million after-tax, or $1.15 per diluted share). "Our productivity efforts since 1997 have yielded tremendous benefits," said Davis. "In 2002, our productivity success and other cost reduction efforts drove our 100 basis-point improvement in gross margin, despite a 10 percent decrease in sales." The company expects its 2003 earnings per diluted share to be in the range of $1.25 to $1.40. The company noted that the guidance includes expected restructuring charges of $12 million, or 6 cents per diluted share, down from the 47 cents per diluted share reported in 2002. Lower expected restructuring and impairment charges account for the expected increase in reported earnings. Other factors impacting 2003 performance include productivity improvements, as well as carryover benefits from prior restructuring actions. These benefits are expected to mostly offset a challenging pricing environment in the company's magazine, catalog and retail markets, and modest to no demand recovery across most of the company's markets. The company expects capital spending to be below $250 million, comparable to 2002 levels. "We are maintaining our focus on cash flow," said Gregory A. Stoklosa, R.R. Donnelley's executive vice president and chief financial officer. "We expect cash flow from operations in 2003 to be more than sufficient to fund necessary investments for the future and our dividend."