Newell Rubbermaid Inc.
) - the producer of Sharpie pens and Rubbermaid containers -
reported fourth-quarter 2012 adjusted earnings per share of 43
cents, marginally beating the Zacks Consensus Estimate of 42
cents and year-ago quarter earnings of 40 cents.
The earnings growth was a result of the positive impact from
pricing and productivity and lower structural selling as well as
general and administrative expenses as a percentage of sales. On
a reported basis, including special items, the company reported
earnings of 35 cents per share compared to 27 cents in the
comparable year-ago quarter.
Top-Line and Margin Details
During the quarter, Newell's net sales inched up 1.6% to
$1,518.8 million, beating the Zacks Consensus Estimate of
$1,514.0 million. Core sales of the company increased 2.2%,
excluding the negative impact from foreign currency translation.
Robust performance at the company's Tools, Baby & Parenting
and Writing segments and improved sales in Latin America are
primarily attributable to this growth.
Newell's quarterly gross profit marginally inched down 0.3%
year over year to $555.0 million, while gross margin contracted
70 basis points to 36.5% primarily due to increased investments
related to fourth quarter events.
Operating income increased 22.5% year over year to $153.8
million, while operating margin expanded 170 basis points to
10.1%. However, the company's normalized operating margin
contracted 10 basis points due to higher expenses related
incentive compensation, customer programs and strategic selling,
general and administrative costs associated with sales force
Other Financial Details
Newell ended the fiscal with cash and cash equivalents of
$183.8 million and long-term debt of $1706.5 million.
Shareholders' equity was $1,996.7 million, excluding
non-controlling interests of $3.5 million.
During the fiscal, the company's capital expenditure came in
at $177.2 million and generated a cash flow of $618.5 million
from operating activities.
Fiscal 2013 Guidance
Concurrently, the company provided its outlook for fiscal
2013. Management anticipates core sales growth of 2%-4% and
adjusted earnings in the range of $1.78-$1.84 per share for
fiscal 2013. Moreover, Newell expects an improvement of 20 basis
points in operating margin during fiscal 2013.
Moreover, this Zacks Rank #4 (Sell) company expects to achieve
its targeted annualized cost savings of $270-$325 million by the
second quarter of fiscal 2015 through its Project Renewal
program. Moreover, Newell will be saving costs between $90
million and $100 million through its Project Renewal program in
the first half of 2013.
The initiative will be funded by savings through reduced
structural selling, general and administrative expenses. The
Project Renewal initiative will facilitate the company in
reducing the complexity of the organization while increasing
investments in the most important growth areas within the
Further, Newell expects to generate operating cash flow in the
range of $575-$625 million in fiscal 2013 with planned capital
expenditures between $175 million and $200 million.
Other Stocks to Consider
Other stocks in the same industry that are worth considering
Tupperware Brands Corporation
Avery Dennison Corporation
). All these companies carry a Zacks Rank #2 (Buy).
AVERY DENNISON (AVY): Free Stock Analysis
JARDEN CORP (JAH): Free Stock Analysis Report
NEWELL RUBBERMD (NWL): Free Stock Analysis
TUPPERWARE BRND (TUP): Free Stock Analysis
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