Donnelley Predicts Lower Earnings, Blames Logistics Business
Press release from the issuing company
CHICAGO, R.R. Donnelley & Sons Company [NYSE: DNY] today announced that it expects full year 2000 earnings per share to be lower than previous guidance. R.R. Donnelley has reduced the range for full-year 2000 earnings to $2.15 to $2.20 per share from the upper $2.20s to the lower $2.30s. These ranges include the $0.06 one-time gain disclosed in the third quarter, 2000.
"We are aggressively addressing our short-term issues, and our long-term outlook remains positive," said Chairman and Chief Executive Officer William L. Davis. "Our long-run print businesses has exceeded our expectations for 2000. We've also made substantial progress in the last several months in our strategy to revolutionize communications effectiveness and expect to report additional details in the first half of next year."
The majority of the shortfall from the company's previous expectations stems from its logistics business. Like other companies in this sector, results have been disappointing. During the fourth quarter R.R. Donnelley Logistics has experienced higher outsourced transportation and fuel costs, as well as higher costs to meet service commitments for both packages and printed material. The company is taking actions to move its mix to higher-margin work and improve the operations of its distribution network.
Several other businesses are experiencing weaker financial results compared with earlier expectations. Sales continue to fall short of expectations in RRD Direct, the company's direct mail business, and in the company's Mexican operations. The company also continues to see increasing pressures across its businesses from national trends in energy and healthcare costs.
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