Valassis Posts 3Q Net Income on Lower Costs

Coupon-clipping by consumers and lower costs propelled Valassis Communications Inc. to a profit in the third quarter, the company said Thursday.

Valassis, based in Livonia, Mich., is a marketing company that provides direct mail and coupons. Its shares rebounded $2.96, or 17.8 percent, to $19.87 in afternoon trading. In the week leading up to its quarterly report, Valassis shares were down about 16 percent.

Benchmark Co. analyst Ed Atorino called the company's quarter "rather impressive."

"They're turning the corner," he said. "People were still very happy with what they did."

The company reported net income of $13.8 million, or 28 cents per share, compared with a loss of $5.2 million, or 11 cents per share, in the same quarter a year ago. Earnings for the latest quarter included a charge of 4 cents per share related to interest rate swap contracts.

Revenue fell 3.5 percent to $544.1 million.

Analysts forecast income of 30 cents per share and revenue of $540.3 million, according to a Thomson Reuters survey.

Total costs and expenses fell to $501.4 million from $549.2 million, as cost of goods sold slid 10 percent to $407.6 million. Operating expenses fell to $21.3 million from $23.3 million.

International, digital media and services was the top performer at the company. Revenue was up 4 percent to $40 million. Revenue from free standing inserts put in newspapers rose 1.3 percent to $92.6 million.

Revenue from Valassis' biggest business, shared mail, fell 2.3 percent to $319.5 million. The group mails single or multiple pages of glossy coupons directly to consumers.

Valassis also raised its outlook for 2009 earnings to a range of $255 million to $265 million before interest, taxes depreciation and amortization. The company's previous estimate was $245 million.

Valassis stock has ranged from $1.05 to $21.01 over the past year.

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