Newell Brands beats by $0.08, beats on revs; reaffirms FY18 guidance; Expands Accelerated Transformation Plan; sells Waddington Group for $2.3 bln
- Reports Q1 (Mar) earnings of $0.34 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus of $0.26; revenues fell 7.6% year/year to $3.02 bln vs the $2.95 bln Capital IQ Consensus, primarily reflecting the negative impact from 2017 divestitures net of acquisitions, the business disruption to the Baby business created by the Toys ‘R' Us reorganization and subsequent liquidation, and significant inventory destocking in the Writing category's office superstore and distributive trade channels. Core sales declined 3.5% driven largely by Writing and Baby.
- Co reaffirms guidance for FY18, sees EPS of $2.65-2.85, excluding non-recurring items, vs. $2.63 Capital IQ Consensus Estimate; sees FY18 revs of $14.4-14.8 bln vs. $14.47 bln Capital IQ Consensus Estimate.
- Expands Accelerated Transformation Plan:
- Restructuring Newell Brands to a more than $9 billion global consumer products company with leading brands in seven core consumer divisions (Appliances & Cookware, Writing, Outdoor & Recreation, Baby, Food, Home Fragrance and Safety & Security);
- Divesting non-core businesses representing ~35 percent of the company's net sales (Jostens, Pure Fishing, Rubbermaid Commercial Products, Mapa/Spontex/Quickie, The Waddington Group, Process Solutions, Rawlings, Goody, Rubbermaid Outdoor/Closet/Refuse & Garage and U.S. Playing Cards) at value creating multiples;
- Applying ~$10 billion in after-tax proceeds from divestitures in combination with free cash flow from operations after dividends to debt repayment and significant accretive share repurchase; and
- Maintaining the company's commitment to its investment grade rating and to the annual dividend of 92 cents per share through 2019, growing thereafter within our target 30 to 35 percent payout ratio range.