Newell Rubbermaid Q1 Profit Beats View; Backs 2015 Outlook

(RTTNews) - Newell Rubbermaid (NWL) Friday reported a 2 percent increase in profit for the first quarter from last year on higher sales and margins. Adjusted earnings per share beat analysts' estimates.

Looking ahead, the consumer and commercial products company affirmed its earnings outlook for fiscal 2015 and said it plans to cut an additional $150 million in annual costs by the end of 2017.

Michael Polk, President and Chief Executive Officer said. "Our Win Bigger businesses of Writing, Commercial Products and Tools grew over seven percent as a result of strong innovation, increased advertising investment and great sales execution. All five global business segments grew core sales, including North American core sales growth of five percent and net sales growth of over eleven percent, our best result in many years."

The company's net income for the first quarter rose to $54.1 million or $0.20 per share from $52.9 million or $0.19 per share in the prior-year period.

The latest quarter's results were also helped by the absence of a $38.7 million prior-year charge associated with the devaluation of the Venezuelan bolivar.

Normalized earnings for the quarter were $0.36 per share, compared with $0.34 per share a year ago. On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $0.34 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter increased 4 percent to $1.26 billion from $1.21 billion during the corresponding quarter last year. Wall Street expected revenues of $1.27 billion.

Core sales for the quarter grew 4.7 percent, excluding a 490 basis point net contribution from acquisitions and planned divestitures as well as a 550 basis point negative impact from foreign currency.

Segment-wise, Writing net sales declined 2 percent from last year to $341.8 million and Tools segment net sales declined 4 percent to $180.4 million.

Meanwhile, Home Solutions' sales grew 15 percent to $364.5 million, Commercial Products' sales rose 1 percent to $185.2 million, and Baby & Parenting sales grew 7 percent to $192.1 million. Core sales climbed in all the five segments.

Newell Rubbermaid said it plans to sell its Rubbermaid medical cart business to create a faster growing, higher margin and more focused portfolio.

Looking ahead to fiscal 2015, Newell Rubbermaid reiterated its outlook for core sales growth of 3.5 percent to 4.5 percent, net sales growth of 3 percent to 4 percent, and normalized earnings of $2.10 to $2.18 per share.

The Street expects the company to earn $2.15 per share for the year on revenue growth of 3.6 percent to $5.93 billion.

The company, now, expects foreign exchange to have a negative impact of about $0.35 to $0.37 per share on normalized earnings per share in 2015. This outlook is $0.04 worse than its previous view and reflects the stronger U.S. dollar to most currencies.

Newell Rubbermaid said it has expanded the Project Renewal restructuring by an incremental $150 million, to capture an incremental $150 million in annualized overhead savings by the end of 2017. The company now projects cumulative annualized savings over total Project Renewal at $620 million to $675 million.

NWL closed Thursday's trading at $38.13, down $0.73 on a volume of 2.65 million shares.