Printing giant LSC Communications reported that revenue for the third quarter ended September 30, 2019, fell 17.9% from the comparable period a year ago, dropping to $834 million. The company did post net income of $24 million, compared to a net loss of $4 million in the third period of 2018.
Both the revenue and earnings numbers contain a number of extraordinary events, some tied to the failed bid by Quad to buy LSC. In particular, the $24 million in net income includes the $45 million ($34 million net of taxes) LSC received from Quad after the merger was contested by the Justice Department and then dropped by Quad.
The revenue figure also has one-time items, and LSC said that after adjusting for acquisitions, dispositions, changes in foreign exchange rates, and pass-through paper sales, organic sales decreased 9.3% from the third quarter of 2018. The decrease in organic net sales, LSC said, “was largely due to the ongoing impact of digital substitution on magazine and catalog volume and lower education book volume driven by earlier back-to-school production that benefited the first half of 2019.”
With the third quarter decline in sales, LSC lowered its financial guidance for the full year. It now expects sales to be between $3.35 billion and $3.40 billion, down from $3.45 billion to $3.55 billion, and has adjusted its EBITDA expectations to between $180 million and $200 million, compared to its previous forecast of $200 million to $240 million.