UPDATE: Newell Rubbermaid 3Q Net Up 54%; Strong 4Q View Given
(Updates with comments from an interview with the company's chief executive,
and recent stock price.)
DOW JONES NEWSWIRES
Newell Rubbermaid Inc.'s (NWL) third-quarter profit surged 54%, as product-
line exits, lower costs and price hikes boosted margins despite continuing weak
demand.
The consumer-goods maker again raised its 2009 earnings forecast, this time to
$1.27 to $1.32 a share from $1.15 to $1.30. The company also reaffirmed its
sales forecast.
In the latest quarter the company's core sales - which exclude acquisitions,
divestitures and foreign-exchange impact - fell 10%. That decline was worse than
the 8% drop in the second quarter. Newell's shares were recently down 7% to $
13.81. In an interview Chief Executive Mark Ketchum said the company expects a
sequential improvement in core sales starting with the fourth quarter and
continues to expect gross margins to improve. The company expects an improvement
in consumer spending next year, he said, but that may be more tilted to the
later half of the year.
Newell Rubbermaid also sees fourth-quarter earnings of 23 cents to 28 cents
and sales down 2% to 4%. Analysts were looking a 27-cent profit and a 5% revenue
decline to $1.38 billion.
Newell Rubbermaid responded to the economic decline by slashing production and
jobs. But in July, crediting its cost controls, the company said it would be
able to resume marketing spending and targeted an increase of $40 million to $50
million from the first half to the second half.
The company - whose brands include storage products, Sharpie pens, and
Calphalon cookware - said profit soared to $85.5 million, or 28 cents a share,
from $55 million, or 20 cents a share, a year earlier. Excluding restructuring
and other costs, earnings rose to 38 cents from 35 cents.
Net sales dropped 18% to $1.45 billion, with 6 percentage points of the
decline coming from planned product-line exits and 2 percentage points from
currency changes.
The company in July projected earnings of 25 cents to 35 cents and a net sales
decline in the "high teens" on a percentage basis, below analysts' then-
estimates.
Gross margin rose to 37.4% from 32.6% amid the cost cutting as well as
product-lineup changes and easing commodities prices.
- By Mike Barris, Dow Jones Newswires; 212-416-2330; mike.barris@dowjones.com
(Anjali Cordeiro contributed to this article)
(END) Dow Jones Newswires
10-28-091226ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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