For the three-month period, net sales grew by 7.8% over the same period last year to $2.68bn. RR Donnelley noted its US print and related services segment rose 6.3%, while its international segment saw a 12% rise. The quarter also saw the company generating $3oom in operating cash flow during the quarter, up $90m over Q3 2010.
During a conference call with analysts to discuss the results, RR Donnelley CEO Tom Quinlan III noted the revenue rise occurred despite the fact its financial management printing business has been impacted by the overall stock market volatility, which caused some companies to put off generating the printed material needed for an IPO - though he added much of that work was simply delayed and not cancelled.
Quinlan also touted RR Donnelley's expansion of its CustomPoint Solutions Group with its ability to do pre-media, variable digital print productions, transpromo communication and logistics - as well as the company's international reach - as among the reasons it was able to land its recent deal with American Media, a US-based publisher of lifestyle and celebrity-themed magazines and websites.
"We continue to have success with regards to print, but we're also getting more opportunities because of our ability to deliver end-to-end solutions that feature our digital multi-platform communications capabilities," he said. "We are building onto the world's best print platform by layering onto it digital resources that are extremely attractive to our customers and prospects."
Quinlan noted CustomPoint had seen a 12.7% increase in ordering activity during Q3 as compared with the same quarter in 2010. "Customers self-entered more than 566,000 orders during the quarter," he said, adding the success of the platform played a role in RR Donnelley boosting its Latin American revenues by 31% during the quarter.
Quinlan noted that the book printing side of its business, most notably text books, continues to be impacted by the economy, the rise of e-readers and other electronic devices, and tightened school budgets.
"The budget deficits that the states have are definitely impacting adoption. The brick-and-mortar sales channel took a big hit with Borders declaring Chapter 11 and believe it or not there are a couple of new devices that are in consumers' hands with tablets and phones," he said.
"But print-on-demand in this area is going to continue to increase and it will not only be for books, but for magazines and catalogs as well."
Quinlan told the analysts RR Donnelley can benefit even in this environment by making the book supply chain more efficient. "We've already started it by taking over warehouses for some customers," he said. "We want to continue to help book publishers know who their ultimate customer is that bought their product - that's something that doesn't exist in the current marketplace - and we want to help book publishers get rid of obsolete inventory and have a better way to handle returns."
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RR Donnelley profit grows on acquisitions and tax benefits
Despite a tough commercial print environment, R.R. Donnelley reported its third quarter net profit rose to $158m, nearly triple the $53m it earned in Q3 2010, though much of that gain was tied to one-time tax benefits, as well as increased revenues due to the acquisition of shareholder and marketing services firm Bowne and others.
