What happened

Shares of marketing and business communications services provider R.R. Donnelley & Sons (NYSE:RRD) surged on Wednesday after the company reported its first-quarter results. RRD beat analyst estimates for both revenue and earnings, sending the stock up 18% by 11:15 a.m. EDT.

So what

RRD reported first-quarter revenue of $1.68 billion, up 1.9% year over year and $90 million above the average analyst estimate. Net organic sales declined by 0.7%, but the acquisition of Precision Dialogue and the recognition of revenue that was previously part of LSC Communications and Donnelley Financial Solutions, both spun-off late last year, drove revenue higher.

The RRD logo.

Image source: RRD.

The variable print segment suffered a 0.4% decline in sales, driven by commercial and digital print volume declines and broad price erosion. The strategic services segment posted a 10.4% revenue increase, driven by the revenue previously part of the spinoff companies. And the international segment reported a 1.4% revenue decline, driven by volume declines, price pressure, and unfavorable changes in foreign exchange rates.

Non-GAAP earnings per share (EPS) came in at $0.14, up from a loss of $0.02 during the prior-year period and $0.15 better than analysts were expecting. GAAP EPS was a loss of $0.71, driven by a charge related to the sale of RRD's equity interest in LSC.

Now what

RRD expects to produce revenue between $6.8 billion and $7.0 billion in 2017, along with non-GAAP EPS between $1.00 and $1.30. While the revenue guidance was unchanged, the EPS guidance represented a $0.10 boost compared to previous guidance.

RRD President and CEO Dan Knotts looked forward to the rest of the year: "With the spinoffs behind us, we are focused on growing our business, and I am pleased to report that we remain on track to deliver against our previous net sales and income from operations guidance for 2017, and are raising our full year non-GAAP diluted earnings per share and operating cash flow guidance due to lower expected taxes."

Timothy Green has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.