RR Donnelley Reports Q3: Holding or gaining market share in key markets

Press release from the issuing company

CHICAGO, Nov. 5 -- RR Donnelley today announced third-quarter 2003 earnings per diluted share of 47 cents, compared to 42 cents in the year-ago period. Revenues for the third quarter were $1.2 billion, up one percent compared to the prior year. Net income was $54 million, compared to $48 million in the third quarter of 2002. Included in the above results for the third quarter of 2003 are restructuring and impairment charges of $2 million ($1 million after-tax, or 1 cent per diluted share). In the year-earlier period, results included restructuring and impairment charges of $23 million ($14 million after-tax, or 12 cents per diluted share). "We continue to improve our fundamental performance and increase the long- term value creation potential of RR Donnelley," said William L. Davis, RR Donnelley's chairman, president and chief executive officer. "In each of our three business segments, we believe we're either holding or gaining market share." Due to the company's strong selling efforts in challenging market conditions, value-added revenue in the print solutions segment remained even with last year's third quarter. Top-line growth in logistics continued; however, profit within this segment declined due to the slower than expected start up of a new facility in York, Penn., as well as losses in the business- to-business operations of Momentum Logistics acquired earlier this year. In the financial services segment net sales increased seven percent during the third quarter compared to the prior year, reflecting higher activity in the U.S. capital markets and the company's strong competitive performance. The company's previously issued guidance that full-year earnings will likely be at the low end of a range of $1.25 to $1.40, remains unchanged. This range includes six cents per diluted share for expected restructuring activity, five cents of which have been recognized through Sept. 30, 2003. The company's guidance continues to incorporate the weak commercial print demand and pricing environment, largely offset by its continued cost reduction and productivity efforts. Capital spending is expected to be below $250 million, unchanged from prior guidance.