News

Avery Dennison, the pressure-sensitive labels manufacturer, has reported an increase in net sales of 3% to $1.7bn (£1bn) for the third quarter of 2008.

The firm's net income was $96.3m, a decline of 6% on the same period in 2007.

Pre-tax profit in the pressure-sensitive labels division fell by 11% to $61m, as higher material costs outpaced the benefits of increased prices.

Avery Dennison chief executive Dean Scarborough said fewer launches and redesigns by packaged goods companies also contributed to a slowdown in this segment.

The company saw label sales rise by 8% to $936m, driven by exchange rate fluctuations and growth in emerging markets. Sales growth net of exchange rate fluctuations was 1%.

Sales declined in the US and were flat in Europe as a result of the current economic crisis.

"We expect normal end-user activity to resume when consumer confidence increases," said Scarborough. "In the near term, we will continue to address cost inflation through additional price increases and productivity improvements."

Sales in Avery Dennison's RFID businesses nearly tripled in the quarter.

The firm expects "deteriorating market conditions" to weaken further in the fourth quarter and raw material costs to reach $125m for 2008, $15m higher than its July estimate. These costs will be passed on through price increases, although the benefit will not be fully realised until the first quarter of 2009, it said.