Shares of ACCO Brands (ACCO -2.07%) climbed 15% on Wednesday after the school and office supplies company reported better-than-expected year-end results. The company was able to manage through headwinds including tariff concerns and a soaring U.S. dollar that persisted through much of 2019.
ACCO Brands reported fourth-quarter earnings per share of $0.46 per share on revenue of $537.4 million after markets closed Tuesday, topping analyst expectations for $0.41 per share in earnings on sales of $534 million. Revenue was up 1.5% year over year, as a $24.8 million boost from acquisitions more than offset a $10.1 million hit due to foreign exchange rates.
Operating income came in at $196.2 million for the year, an increase of 4.9% from 2018 even after accounting for the unfavorable impact of foreign exchange rates. Net sales increased 0.7% to $1.956 billion, thanks to international acquisitions.
"Our company enters a new decade as a growing, well-diversified, branded consumer, school, and office products business with a track record of product innovation, strong in-market execution, and efficient operations," CEO Boris Elisman said in a statement. "In 2020, we are expecting another year of strong progress against our strategic imperatives."
ACCO Brands forecasted flat revenue in 2020 and full-year earnings of between $1.20 and $1.30 per share, just shy of analyst expectations for $1.31 per share in earnings. But the company did say to expect free cash flow of between $165 million and $175 million in 2020, well above the $118 million in free cash flow reported in 2019.
Coming into earnings, shares of ACCO had been down more than 30% over the past three years, losing to the S&P 500 by more than 70 percentage points, due to investor concerns about how macroeconomic conditions would weigh on consumer goods companies. ACCO shares still have a lot of ground to make up, but the stock is rallying on Wednesday on evidence that the company is managing well through a difficult period.