Newell Rubbermaid Q2 Results Tops Estimates, Boosts 2015 Outlook

(RTTNews) - Consumer and commercial products company Newell Rubbermaid, Inc. (NWL) reported Friday a profit for the second quarter that edged down from last year, despite sales growth, hurt by improved operating margins and higher restructuring charges.

However, both adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also raised earnings and core revenue growth forecast for the full-year 2015.

"We have posted a strong set of second quarter results with core sales growth of 5.1 percent and normalized earnings per share growth of 8.5 percent, despite unprecedented foreign exchange pressure on earnings," President and CEO Michael Polk said.

The Atlanta, Georgia-based maker of Sharpie pens and Rubbermaid containers posted net income of $148.5 million for the second quarter, lower than $150.6 million in the prior-year quarter, while earnings per share edged up to $0.55 from last year's $0.54.

Excluding items, normalized earnings for the quarter was $174.5 million or $0.64 per share, compared to $165.5 million or $0.59 per share in the year-ago quarter.

Normalized earnings included a $0.11 per share negative impact from foreign exchange.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.62 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 3.9 percent to $1.56 billion from $1.50 billion in the same quarter last year, and topped twelve Wall Street analysts' consensus estimate of $1.54 billion.

Core sales grew 5.1 percent, excluding 600 basis points of negative foreign currency impact and 480 basis point net contribution from acquisitions and planned divestitures.

"Core sales grew in all five of our segments and in all four geographic regions. Our Win Bigger businesses grew 6.5 percent, led by our global Writing business which grew core sales over ten percent. Momentum continued to build in our Baby & Parenting business, which also had a strong quarter with core growth of 6.0 percent," Polk added.

Writing segment net sales grew 1.3 percent to $495.9, and net sales for home solutions segment increased 14.4 percent to $438.5 million from a year ago. Baby & parenting segment net sales also increased 14.7 percent to $210.7 million from last year.

Tools segment net sales totaled $205.2 million, down 7.7 percent, while commercial products segment net sales declined 5.8 percent to $210.6 million from the year-ago quarter.

Geographically, sales in North America grew 6.5 percent to $1.19 billion from last year, with U.S. sales increasing 7.9 percent, while Canada sales declined 11.1 percent.

International sales decreased 3.6 percent to 375 million from last year, with sales from Europe, Middle East, and Africa decreasing 11.4 percent, and Asia Pacific sales declining 4.7 percent, while Latin America sales grew 11.5 percent.

Operating margin for the quarter contracted 150 basis points to 13.8 percent from last year's 14.2 percent, driven primarily by increased restructuring and other Project Renewal transformation costs.

The company noted that its current growth momentum, its plans for strong innovation and increased brand support in the second half as well as continued cost benefits from Project Renewal gives it the confidence to raise its guidance for full-year 2015.

Looking ahead to fiscal 2015, the company now expects normalized earnings in the range of $2.14 to $2.20 per share, on projected core sales growth of 4 to 5 percent, up from the prior projection for normalized earnings of $2.10 to $2.18 per share, on projected core sales growth of 3.5 to 4.5 percent.

The Street is currently looking for full-year 2015 earnings of $2.16 per share, on annual revenues growth of 3.3 percent to $5.91 billion.

The company added it now expects foreign exchange to have a negative impact of about $0.36 to $0.39 per share on normalized earnings per share in 2015, driven by the stronger U.S. dollar to most currencies.

In Friday's regular trading session, NWL is currently trading at $43.43, up $0.63 or 1.47% on a volume of 0.65 million shares after hitting a 52-week high of $44.00 in early trades.