Label maker and brand ID company Avery Dennison Corporation (NYSE: AVY) posted good 1Q 2007 earnings on April 24. Net income for the quarter was up by just over $10 million to $79.2 million or EPS $0.80 compared to EPS $0.68 in 1Q 2006. Net sales were up 3.9% to $1.39 billion. Only part of this sales growth is due to acquisition. The rest is due to organic growth, always a good sign. Avery Dennison returned these good numbers despite a price increase during the quarter that pushed companies to stock up in 4Q 2006.

According to CEO Dean Scarborough, Avery Dennison is still in the midst of a restructuring project which will eventually result in substantial cost savings. Management estimates total savings of over $40 million in FY 2007 alone. In quarters to come, Avery Dennison will see growth via the completion of its acquisition of brand identification company Paxar. The US government's anti-trust unit gave permission for the acquisition to move forward on 20 April. Paxar shareholders are expected to vote in favor of the acquisition during their summer meeting.

In the meantime Avery Dennison is putting up good sales numbers, up 9.2% to $860 million in its pressure-sensitive materials division. Much of this growth came from the company's international markets. This increase helped offset a 10.6% decline to $214 million in its office and consumer products division, with a softening of the North America market and January 2007 price increases. Retail information services increased 1.6% to 156 million. Half of this increase came from organic growth, and half by acquisition. Excluding the Paxar acquisition, Avery Dennison is on track to post FY revenue growth numbers between 2-5%, or FY EPS of $3.95-4.25. The stock closed at $65.91, up $0.27 on 11 June 2007.