Avery Dennison slashes '08 profit expectations

Shares dropped $1.63, or 3.6 percent, to $43.61 in morning trading. In the last 52 weeks, shares have ranged from $40.05 to $68.29.

The company now expects full-year earnings per share of $3.75 to $3.95, excluding a 40 cents per share charge for restructuring, asset impairment and acquisition integration.

Analysts polled by Thomson Financial expect 2008 earnings per share of $4.03.

"The company's earnings expectations reflect revenue flat to slightly down on an organic basis for 2008. Slowing in European and Asian markets is expected, in addition to the slower U.S. market," Avery Dennison said in a statement.

"Expectations for raw material inflation in 2008 have risen to approximately $110 million, representing a 60 percent increase since April. Because the majority of the benefit from pricing actions is expected to materialize later in the year, raw material inflation will significantly outpace price increases realized in the full year."

Also, the company said second-quarter profit rose 7 percent as an acquisition helped sales in its retail information systems segment to double.