Early market trading share price for Newell Rubbermaid (NWL, Financial) rose 4.98% to hit $40.03 after the consumer products manufacturer reported a mixed set of results this Friday. Newell Rubbermaid reported a 2 percent rise in profits for the first quarter in comparison to last year’s same quarter on bigger sales figures and margins. This was post reports of a mixed first quarter financial result for the first quarter of the consumer products developer.
The producer of Sharpie pens reported an EPS of 36 cents for the first quarter of 2015, almost two cents above the analysts’ expectations. Net sales went up 4.1% to touch $1,264 million year-over-year, but fell short of analysts’ expectations of $1,269 million. The Rubbermaid containers manufacturer reported growth of core sales by 4.7% which excluded the impact of foreign currency translation and the acquisition cost, thereby reflecting sales growth across all their segments.
The company’s operating cash flow usage was $154.3 million compared to $92.1 million used a year earlier. Newell Rubbermaid made a contribution of $70 million towards pensions during the first quarter of the year. The company’s operating margin was 7.8 percent while their operating income reached $98.2 million.
A forward looking plan of action
The consumer and commercials products company plans to cut an additional $150 million in costs annually by the end 2017. Newell Rubbermaid announced it would be pursuing the sale of its Rubbermaid medical cart business. This planned divestiture will help boost the company’s progress towards creating a much more efficient and faster growing portfolio that would eventually enable accelerated performance.
Words from the CEO
According to Michael Polk, Newell Rubbermaid’s CEO and President- “We've had a strong start to the year with first quarter core sales growth of 4.7 percent and normalized earnings per share growth of 5.9 percent… 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.’’
Analyst call
Analysts are rating Newell Rubbermaid a ‘BUY’ stock for now, thanks to many clear positive investment measures that are lining up to see this stock outperform the remainder of the stocks on the exchange. Newell Rubbermaid’s stock movement reflects the confidence and hope investors have on the company. The company’s strengths lie in various sections such as their revenue growth, a sizable return on equity, fast growing profit margins as well as a solid stock price performance. These strengths clearly outweigh the fact the company has, in recent times, had sub-par net income growth.
