Newell Rubbermaid Inc.
) - the producer of Sharpie pens and Rubbermaid containers -
reported second-quarter 2013 adjusted earnings per share of 50
cents, beating the Zacks Consensus Estimate of 49 cents as well
as 47 cents earned in the year-ago quarter. Results benefited
from better operating performances of continuing businesses and
lower interest expenses.
On a reported basis, including special items, the company
reported earnings of 37 cents per share, compared with 38 cents
in the comparable year-ago quarter.
Top-Line and Margin Details
During the quarter, Newell's net sales increased 3.5% to
$1,474.7 million, compared with $1,425.3 million in the
prior-year quarter. Core sales of the company grew 4.5%,
excluding a negative impact of 100 basis points (bps) from
foreign currency translation. However, the company's top line
missed the Zacks Consensus Estimate of $1,483.0 million
Newell's quarterly gross profit rose 5.4% year over year to
$582.7 million, while gross margin expanded 70 bps to 39.5%,
benefiting from improved productivity, partially offset by
inflation and pricing.
Adjusted operating income increased 10.9% year over year to
$219.5 million, while operating margin expanded 100 bps to 14.9%.
During the quarter, the company benefited from the cost savings
generated by the Project Renewal initiatives and improved
productivity, partially offset by enhanced brand support.
Other Financial Details
Newell ended the quarter with cash and cash equivalents of
$154.1 million and long-term debt of $1,669.0 million.
Shareholders' equity was $2,037.0 million, excluding
non-controlling interests of $3.5 million.
During the first six months of 2013, the company's capital
expenditures came in at $57.0 million and it utilized $59.8
million of cash for operating activities. During the said
quarter, the company returned $43.6 million to shareholders
through dividend payouts and the repurchase of 1.45 million
shares for $38.6 million.
Fiscal 2013 Guidance
Buoyed by better-than-expected quarterly results, the company
raised its lower-end earnings guidance for fiscal 2013.
Management now anticipates adjusted earnings in the range of
$1.80-$1.84 per share, compared with $1.78-$1.84 forecasted
Further, Newell reiterates its core sales growth, normalized
operating margin and operating cash flow guidance for fiscal
2013. The company still expects core sales growth of 2%-4% and an
improvement of up to 20 bps in the operating margin during fiscal
2013. Further, Newell expects to generate operating cash flow in
the range of $575-$625 million in fiscal 2013, with planned
capital expenditures between $150 million and $175 million.
Moreover, this Zacks Rank #2 (Buy) company expects to achieve
its targeted annualized cost savings of $270-$325 million by the
second quarter of fiscal 2015 through its Project Renewal
The initiative will be funded by savings through a reduction
in structural selling as well as general and administrative
expenses. The Project Renewal scheme will enable the company to
reduce the complexities of the organization, while increasing
investments in the most important growth areas within the
Other Stocks to Consider
Other stocks that are worth considering this earnings season
Big 5 Sporting Goods Corp
Dean Foods Co.
). All these stocks carry a Zacks Rank #2 (Buy).
BIG 5 SPORTING (BGFV): Free Stock Analysis
DEAN FOODS CO (DF): Free Stock Analysis
NORDSTROM INC (JWN): Free Stock Analysis
NEWELL RUBBERMD (NWL): Free Stock Analysis
To read this article on Zacks.com click here.