Avery Dennison Corp. (AVY) was sued by 3M Co. (MMM) for a patent infringement in the United States District Court for the District of Minnesota. 3M filed a lawsuit against Avery accusing the latter of infringing 13 of 3M’s patents relating to reflective sheeting used on road signs, traffic cones and commercial vehicles.
Avery is introducing a retro reflective sheeting product in the market. 3M believes that the product of Avery violates the patents granted to the company for a period extending from 1998 to 2009 .It seeks a court order to stop Avery from selling its reflective sheeting products and claims money for the damages caused by the latter. Avery is yet to give a response to the charges.
The two companies are longtime rivals and the largest competitors for reflective sheeting in the market. They had similar tiffs in the past. In May 2010, Avery had sued 3M over label sheet assembly patents and over reflective sheeting patents in 2001.
For the first quarter of fiscal, 2010, Avery reported earnings per share of 61 cents, surpassing the Zacks Consensus Estimate of 43 cents and the year-ago earnings of 11 cents. Avery ended the first quarter with cash and cash equivalents of $143.6 million, an increase of 73% year over year. The company had outstanding long-term debt of $1,702 million at the end of the first quarter.
Avery expects total revenues in fiscal 2010 to grow in the range of 5 to 7% year over year. Adjusted earnings per share should range between $2.50 and $2.80 per share. Free cash flow is expected to be in the range of $300 to $350 million.
The closing share price of Avery for Avery dipped to $32.39 on June 29, 2010 as compared to the previous day’s closing share price of $34.19.
St. Paul, Minnesota-based 3M is a diversified technology provider operating under six segments: Industrial and Transportation; Health Care; Consumer and Office; Safety, Security and Protection Services; Display and Graphics; and Electro and Communications.
Based in Pasadena, California, Avery produces pressure-sensitive materials, office products, tickets, tags, labels, and other converted products.
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