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What helped R.R Donnelley (RRD) gain around 40% in pre-market trading?

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The rise happened in pre-market

The rise in stock of R.R Donnelley ‎(RRD)‎ in pre-market has been observed. R. Donnelley & Sons Company (RRD) stock soared 41.67% to $3.4 in the pre-market trading.

 The company basically is an American Fortune 500 integrated communications that deal with marketing and business communications, commercial printing, and related services. The company does operate in the USA, Europe, Asia, and other countries but they earn the most from the US.

Why

This rise in RRD stock has happened after the company announced Q4 results. In the quarterly results, the earning per share has increased over the last year to $0.71, which beat the estimate of $0.21.  The major points being discussed under the Q4 results were:

Q4 major outcomes

According to both GAAP (Generally accepted accounting principle) including the effect of dispositions and FX, the sales decreased for about 5.6%, andNon GAAPdecreased by 4.8%. In Q4 results the sales have increased as compared to the last two quarters.

Through Cost reduction actions both GAAP and Non GAAP operating margin has improved 30bps and 50bps respectively.

The company’s operating cash flow of $124.6 million in the quarter is down from the last year and also the company was successful in paying $47 million to dissolve 25 deferred compensation plans. The company has also managed to gain a good amount of cash from non-operating activities which includes $244 million primarily from the dispositions of the logistic businesses and three building sales. In addition to this company’s outstanding work resulted in earning $96million from liquidating certain life insurance policies.

To these achievements the CEO of the company has been extremely overwhelmed and appreciated the whole team of RRD for such an amazing result. The CEO says that their team members work tremendously to provide innovative solutions to their clients, they work really hard to implement their cost reduction plans which eventually helps in improving their capital structure

Conclusion

The company has emerged out very well from a depressing state. The loss is changing into gains. This can definitely be a good time for investors and the company both.

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