Newell Rubbermaid Inc.
) - the producer of Sharpie pens and Rubbermaid containers -
reported third-quarter 2013 adjusted earnings per share of 52
cents, beating the Zacks Consensus Estimate of 50 cents as well
as 47 cents earned in the year-ago quarter. Results benefited
from increased operating income, lower interest expenses and
lower tax rate.
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On a reported basis, including special items, the company
reported earnings of 66 cents per share, compared with 37 cents
in the comparable year-ago quarter.
Top-Line and Margin Details
During the quarter, Newell's net sales increased 2.1% to $1,487.2
million, compared with $1,456.9 million in the prior-year
quarter. Core sales of the company grew 3.3%, excluding a
negative impact from foreign currency translation. However, the
company's top line missed the Zacks Consensus Estimate of
Newell's gross profit rose 1.1% year over year to $564.0 million,
while adjusted gross profit was $566.0 million. Adjusted gross
margin expanded 30 bps to 38.1%, benefiting from improved
productivity and pricing, largely offset by inflation and
Adjusted operating income increased 4.2% year over year to $216.7
million, while operating margin expanded 30 bps to 14.6%. During
the quarter, the company benefited from the cost savings
generated by the Project Renewal initiatives in SG&A expenses
and better cost leverage with net sales improvement, partially
offset by enhanced brand support.
Other Financial Details
Newell ended the quarter with cash and cash equivalents of $197.4
million and long-term debt of $1,671.1 million. Shareholders'
equity was $2,189.6 million, excluding non-controlling interests
of $3.5 million.
During the third quarter, the company's capital expenditures came
in at $28.7 million and generated $360.8 million in cash from
operating activities. During the quarter, the company returned
$44.0 million to shareholders through dividend payouts and the
repurchase of 1.8 million shares for $90.8 million.
Fiscal 2013 Guidance
The company retained its projections for fiscal 2013, guiding
adjusted earnings in the range of $1.80-$1.84 per share.
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. Newell expects to generate operating cash flow in the range
of $575-$625 million in fiscal 2013, with planned capital
expenditures between $125 million and $150 million.
Moreover, this Zacks Rank #3 (Hold) 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
Energizer Holdings Inc.
). Of these, WD-40 carries a Zacks Rank #1 (Strong Buy), while
Energizer and Kimberly-Clark hold a Zacks Rank #2 (Buy).