RR Donnelley (RRD) Tops Q3 EPS by 19c, Revenues Miss

RR Donnelley (NYSE: RRD) reported Q3 EPS of $0.32, $0.19 better than the analyst estimate of $0.13. Revenue for the quarter came in at $1.19 billion versus the consensus estimate of $1.26 billion.

Key messages

• GAAP net sales decreased 15.9%; non-GAAP organic net sales decreased 12.1%
• GAAP income from operations was down $55.1 million versus the prior year primarily due to a $56.5 million increase in restructuring and other charges; current quarter included a charge for MEPP withdrawal obligations related to the LSC Communications (“LSC”) bankruptcy
• Non-GAAP adjusted income from operations flat to prior year despite sales decline; adjusted operating margin improved by 100 basis points driven by aggressive cost-out actions
• GAAP loss per share from continuing operations of $0.13 included third quarter charges of $0.52 per share for restructuring and other
• Non-GAAP adjusted income per share from continuing operations of $0.32 increased $0.07 from prior year quarter
• Operating cash flow, including discontinued operations, increased $40.1 million from prior year period, year-to-date improvement now at $113.0 million
• Entered into definitive agreement to sell its Logistics DLS Worldwide business for $225 million, expected to close by year end
• Launched plan to redeem $83.3 million of principal outstanding on Senior Notes due March 15, 2021

“We delivered a strong third quarter amidst a volatile business environment. We continue to win new business, execute our cost reduction plans, and improve our capital structure with a disciplined focus on generating cash flow, all while protecting the health and well-being of our employees,” said Dan Knotts, RRD President and Chief Executive Officer. “Through the combination of better than expected net sales performance and a significant reduction in our cost structure, we delivered adjusted income from operations comparable to the prior year, improved our operating margin, and achieved our third consecutive quarter of improved operating cash flow. Despite ongoing uncertainty and volatility, we continue to advance our strategic priorities and are confident in our ability to emerge from the pandemic as a stronger RRD.”

For earnings history and earnings-related data on RR Donnelley (RRD) click here.

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