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.
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.
Consumer-products makers were hurt as shoppers embraced
lower-cost and private-label brands. Newell Rubbermaid responded to
the 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.
Shares closed at $14.82 and didn't trade premarket. The stock is
up 52% this year.
-By Mike Barris, Dow Jones Newswires; 212-416-2330;
mike.barris@dowjones.com