correction: corrects headline and first paragraph to say adjusted profit tops view
Consumer and commercial products company Newell Rubbermaid, Inc. (NWL) reported Friday a profit for the first quarter that declined from last year, hurt by higher restructuring charges and lower margins. Adjusted earnings per share topped analysts' expectations, while core revenues missed their estimates. The company maintained its earnings and core revenue growth forecast for the full-year 2013.
The company also announced plans to divest non-strategic businesses as part of the 'Growth Game Plan', The company noted that the divestiture of the Hardware and Teach Platform businesses will help it create a faster growing, higher margin and more focused portfolio in order to help drive accelerated performance.
The two businesses are reclassified as discontinued operations, with the remaining specialty segment businesses, comprising Dymo Office and Endicia, consolidated within the writing segment.
"We've had a good start to the year and made further progress driving the Growth Game Plan into action. Underlying financial results on our continuing business were solid, with particularly strong performances from our Commercial Products, Tools and Baby & Parenting operating segments," President and CEO Michael Polk said in a statement.
The Atlanta, Georgia-based maker of Sharpie pens and Rubbermaid containers posted net income of $54.2 million or $0.19 per share for the first quarter, down from $79.3 million or $0.27 per share in the prior-year quarter. The results for the latest quarter included $0.03 per share of loss from discontinued operations.
Excluding items, normalized earnings for the quarter was $102.1 million or $0.35 per share, compared to $95.7 million or $0.32 per share reported in the year-ago quarter.
On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $0.32 per share for the first quarter. Analysts' estimates typically exclude special items.
Net sales edged down 0.8 percent to $1.25 billion from $1.24 billion last year. Core sales for the quarter grew 2.5 percent to $1.25 billion from $1.22 billion in the same quarter last year, but missed ten Wall Street analysts' consensus estimate of $1.32 billion.
Writing segment net sales declined 9.3 percent to $340.6, while net sales for home solutions segment increased 3.7 percent to $338.9 million from a year ago.
Tools segment net sales totaled $188.6 million, down 1.0 percent, while commercial products segment net sales grew 4.4 percent to $183.1 million from the year-ago quarter. Baby & parenting segment net sales also increased 4.1 percent to $189.6 million from last year.
Geographically, sales in North America grew 2.4 percent to $880.7 million from last year, with U.S. sales increasing 3.0 percent, while Canada sales declined 4.8 percent.
Meanwhile, International sales decreased 7.8 percent to 360.1 million from last year, with sales from Europe, Middle East, and Africa down 17,6 percent, and Asia Pacific sales declining 10.5 percent, while Latin America sales grew 21.8 percent.
Operating margin for the quarter contracted 200 basis points to 7.9 percent from last year's 9.9 percent, as gross margin declined 80 basis points.
Looking ahead to fiscal 2013, the company continues to expect earnings in a range of $1.54 to $1.60 per share, and normalized earnings in the range of $1.78 to $1.84 per share, on projected core sales growth of 2 to 4 percent. Street is currently looking for full-year 2013 earnings of $1.82 per share, on annual revenues of $6.05 billion.
The company also noted that it is on track to realize cumulative annualized cost savings of about $270 to $325 million by the second quarter of 2015 related to Project Renewal, with cumulative annualized savings of $90 to $100 million expected by the first half of 2013.
NWL closed Thursday's regular trading session at $26.39, up $0.22 on a volume of 5.87 million shares. In the past 52-week period, the stock has been trading in a broad range of $16.67 to $26.96.
by RTT Staff Writer
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