R R Donelly posts 92 per cent plunge in profits

R R Donnelley & Sons on Wednesday reported that net income dropped 92 per cent from a year ago, hurt by hefty restructuring charges and a higher tax rate, while sales fell on cooling demand for printing services.

The Chicago-based commercial printer said first-quarter net earnings of $13.9 million, or 7 cents a share, down from $182.5 million, or 85 cents, earned a year ago when a federal tax settlement boosted its profit.

Sales for the quarter fell 18 per cent to $2.5 billion.

Excluding charges for restructuring and impairment it had earnings from continuing operations of 24 cents a share. The company, whose services include direct mail, book publishing, advertising, and catalogues, has been battling price declines and reduced demand as companies spend less money on printing services.

Gross margin for the quarter fell to 23.3 per cent against 26 per cent. Its tax rate was 41.4 per centcompared to 16.3 per cent in the year-earlier period.

R R Donnelley has boosted its cash position since the end of 2008. It reported cash and cash equivalents of more than $1 billion, up from $324 million on 31 December.