Stronger margins lift Newell Rubbermaid 23%

By Dow Jones Newswires
Posted July 30, 2010 at 6:06 a.m.

Newell Rubbermaid Inc.’s second-quarter earnings rose 23 percent as the household-goods company recorded stronger margins and a lower tax rate.

However, benefits of strong international demand were offset by a shift in buying patterns to the quarter before an information-technology change.

The results beat analysts’ expectations and the company raised its 2010 earnings guidance by 2 cents while affirming its revenue outlook.

Consumers began spending more earlier this year, though they remain cautious. Newell recorded first-quarter sales growth — the first in a year, partly on consumer spending and inventory restocking. Newell exited some of product lines, focused its spending and trimmed costs during the recession. The company’s market share also grew during the downturn.

Newell — whose lineup includes storage products, Sharpie pens and Calphalon cookware — reported a profit of $130.4 million, or 41 cents a share, up from $105.7 million, or 37 cents a share, a year earlier. Excluding restructuring and other charges, earnings climbed to 51 cents from 47 cents.

Revenue decreased 0.5 percent, to $1.5 billion, owing to the shift in buying patterns. Excluding that, core sales were up 3.8 percent. Prior-year product line exits reduced sales by 1.9 points.

Analysts polled by Thomson Reuters most recently forecast earnings of 44 cents on revenue of $1.52 billion.

Gross margin rose to 39.3 percent from 37.1 percent amid the cost-cutting.

Shares closed Thursday at $15.58 and were inactive premarket.

Read more about the topics in this post: ,
 

Companies in this article

Comments are closed.