Direct Mail Drives Printers' Quarterly Results

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Two of three printers reporting quarterly results indicated that direct mail was a driving factor in their performance.

R.R. Donnelley & Sons Co., Chicago, said yesterday that second-quarter 2006 net sales totaled $2.3 billion, up 17.7 percent from the second quarter of 2005. Net earnings from continuing operations totaled $124.4 million, or 57 cents per diluted share, compared with $95.3 million (44 cents per diluted share) in second quarter 2005.

Net sales for the company's Publishing and Retail Services segment, which includes its catalog business, increased 14.8 percent to $1.1 billion from second-quarter 2005 due mainly to sales increases in its international operations and directory business and several acquisitions.

Net sales for the Integrated Print Communications segment, which includes its direct mail services, rose 33.5 percent to $727.2 million from second-quarter 2005, mainly based on several acquisitions as well as sales growth in its financial print, short-run commercial print and direct mail businesses.

Net sales for the Forms and Labels segment increased 3.5 percent to $423.6 million.

Reporting first-quarter results yesterday was printer Heidelberger Druckmaschinen AG, Heidelberg, Germany, which said that incoming orders increased 21 percent versus last year and sales rose 9 percent over last year to 719 million euros ($917 million).

The Heidelberg Group,, recorded an operating result of 16 million euros for its first quarter ended June 30 compared with 7 million euros in the previous year. The net profit totaled 5 million euros compared with 1 million euros in the previous year.

In the press division, sales rose to 620 million euros from 567 million euros last year. In the Postpress division, quarterly sales were 89 million euros compared with 80 million euros last year.

Reporting results after the markets closed Monday was Vertis Communications, Baltimore, which said that second-quarter revenue decreased 2 percent to $356.1 million. However, direct mail revenue increased 14 percent, largely due to improved volume. The acquisition of USA Direct in May 2006 contributed about $2.6 million to the quarter-over-quarter growth.

The company's advertising inserts revenue declined 4 percent because of lower volume and pricing, and other revenue declined based mostly on lower premedia revenue.

The net loss in the second quarter totaled $5 million versus a net loss of $29 million in the same period last year.


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