Newell Brands Lifts FY Profit View on Higher Sales, Tariff Refund

Dow Jones
Jul 31
 

Newell Brands raised its earnings outlook on higher second-quarter sales and a bump from tariff refunds.

The company behind Sharpie markers and Elmer's glue said Friday it now expects full-year normalized earnings per share to be 73 cents to 77 cents, up from 56 cents to 60 cents previously.

It also narrowed its net-sales growth outlook to 1% to 2%, from flat to 2%.

Shares climbed 10% to $5.67 in pre-market trading Friday.

Profit in the second quarter was $106 million, or 25 cents a share, compared with $46 million, or 11 cents a share, a year earlier. Analysts expected 17 cents a share, according to FactSet.

Sales rose 3% to $1.99 billion in the quarter. Analysts surveyed by FactSet forecast sales of $1.98 billion. Core sales increased 2.3%.

The company also expects to receive $126 million in pretax tariff refunds for trade duties expensed this year and last. The refunds widened profit and contributed to management's guidance raise, as Newell expects to receive the cash refund in the second half of the year, it said.

Core sales gained in Newell's learning-and-development segment, which includes its baby and writing businesses, as well as in its outdoor-and-recreation segment, Newell said.

Core sales declined less than 1% in home and commercial, as a decline in its commercial business offset gains in its kitchen and home-fragrance lines.

Overall, Newell's stronger sales, productivity and overhead management offset higher-than-expected commodity and transportation costs during the quarter, Chief Financial Officer Mark Erceg said.

Newell expects 2%-to-3% sales growth in the third quarter, with normalized earnings per share anticipated at 18 cents to 20 cents.

 
 

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