Newell Brands Slides Despite Solid Q4 Earnings

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Newell Brands Inc. (NYSE: NWL) released its most recent quarterly results before the markets opened on Friday. The company said that it had $0.68 in earnings per share (EPS) and $3.7 billion in revenue, compared with consensus estimates from Thomson Reuters of $0.67 in EPS on revenue of $3.69 billion. The same period of last year reportedly had EPS $0.80 and $4.14 billion in revenue.

Keep in mind that 24/7 Wall St. had previously listed Newell’s CEO on the list of the 20 Worst CEOs in 2017.

Global e-commerce sales grew by more than 25%. E-commerce represents 11% of net sales and has an accretive operating margin.

The company reported its segments for the quarter as follows:

  • The Live segment generated net sales of $1.72 billion, a 2.7% increase compared with $1.68 billion in the prior year.
  • The Learn segment generated net sales of $551 million, an 8.9% decline.
  • The Work segment generated net sales of $705 million, a 3.0% decline.
  • The Play segment generated net sales of $563 million, a 6.6% increase.
  • The Other segment generated net sales of $198 million, a decline of 66.7%.

Looking ahead to 2018, the firm reaffirmed its full-year outlook for core sales growth. Newell expects to see EPS in the range of $2.65 to $2.85 with revenues between $14.4 billion and $14.8 billion. The consensus estimates call for $2.71 in EPS on $14.41 billion in revenue for the year.

Michael Polk, CEO of Newell, commented:

Our fourth quarter results were in-line with those we announced earlier. We had a particularly good outcome on cash flow but work to do on our other metrics. The entire Board and management team recognize what needs to be done and we have taken decisive action to deliver the results and value our shareholders expect. In the fourth quarter, we generated approximately $1 billion of operating cash flow, strengthened our balance sheet and reduced debt. Over the course of 2017, we drove more than 25 percent e-commerce growth and increased market share across our portfolio – all while returning $581 million in capital to our shareholders.

Shares of Newell traded down almost 5% at $27.63 Friday morning, with a consensus analyst price target of $29.71 and a 52-week range of $23.85 to $55.08.