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Newell Brands Q4 sales beat, shares fall on soft outlook

  • Newell Brands Inc. sees a 0.6% dip in premarket trading as investors react to the company’s fourth-quarter earnings report.
  • The consumer goods company reports a net loss of $86 million, or a loss of 21 cents per share, compared to a net loss of $249 million, or a loss of 60 cents per share, in the same quarter last year.
  • Newell Brands’ adjusted earnings of 22 cents per share surpass analysts’ expectations of 17 cents per share.
  • The company’s sales of $2.08 billion, while a 9% decline from the prior year’s quarter, surpass the FactSet forecast of $1.98 billion.
  • Newell Brands attributes the sales decline to a core sales decrease of 9.3%.
  • The company’s CFO, Mark Erceg, highlights improved gross margin and operating margin, as well as strong operating cash flow and debt reduction.
  • Newell Brands expresses confidence in its ability to overcome macro-economic challenges and strengthen performance through investments in core capabilities and business transformation.
  • The company projects net sales between $7.45 billion and $7.7 billion, and adjusted earnings of 52 cents to 62 cents per share for 2024.
  • Analysts surveyed by FactSet expect full-year sales of $7.7 billion and earnings of 77 cents per share.
  • Newell Brands shares have fallen 42.8% in the last 52 weeks, while the S&P 500 index has gained 22.2%.

Introduction

Newell Brands Inc., known for its popular brands such as Rubbermaid, Sharpie, Graco, and Yankee Candle, has reported better-than-expected fourth-quarter earnings and sales. However, the company’s soft full-year outlook has led to a 0.6% drop in premarket trading. This news comes as investors analyze the financial performance and future prospects of the consumer goods company.

Main Content

Strong Earnings and Sales Performance

Newell Brands’ fourth-quarter earnings report showcases a net loss of $86 million, or a loss of 21 cents per share. While this represents a loss, it is a significant improvement compared to the net loss of $249 million, or a loss of 60 cents per share, in the same quarter last year. On an adjusted basis, the company earned 22 cents per share, exceeding analysts’ expectations of 17 cents per share.

The company’s sales for the quarter totaled $2.08 billion, which is a 9% decline from the previous year’s quarter. Despite the sales decrease, Newell Brands’ performance surpassed the FactSet forecast of $1.98 billion. The sales decline was primarily driven by a core sales decrease of 9.3%, reflecting the challenging macro-economic backdrop.

Positive Financial Indicators

Newell Brands’ CFO, Mark Erceg, highlights the positive financial indicators during the fourth quarter. The company experienced significant expansion in both gross margin and operating margin compared to the previous year. Additionally, the company’s operating cash flow was robust, increasing by $1.2 billion to $930 million. This allowed Newell Brands to reduce its debt by approximately $500 million, demonstrating its commitment to improving its financial position.

Despite the challenging macro-economic environment, Newell Brands remains confident in its ability to navigate the headwinds and achieve its corporate strategy. The company is making substantial investments to enhance its core capabilities and accelerate its business transformation. These investments aim to strengthen Newell Brands’ performance and position the company for long-term success.

Soft Full-Year Outlook

Newell Brands’ full-year outlook for 2024 indicates net sales between $7.45 billion and $7.7 billion, with adjusted earnings ranging from 52 cents to 62 cents per share. Although this projection aligns with the company’s growth plans, analysts surveyed by FactSet have higher expectations, anticipating full-year sales of $7.7 billion and earnings of 77 cents per share.

The discrepancy between Newell Brands’ outlook and analysts’ expectations may have contributed to the decline in the company’s shares. Investors are closely monitoring the company’s ability to execute its strategic initiatives and achieve its financial targets.

Conclusion

Newell Brands’ fourth-quarter earnings report showcases better-than-expected performance, with earnings and sales surpassing analysts’ forecasts. The company’s improved gross margin, operating margin, and strong operating cash flow demonstrate its progress in enhancing its financial position. Despite a soft full-year outlook, Newell Brands remains confident in its ability to overcome macro-economic challenges and achieve its corporate strategy. As investors assess the company’s financial prospects, the stock market reacts with a 0.6% decline in premarket trading.

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