The earnings performance was negatively impacted by a 5.5% decline in net sales to $1.71 billion. However, the results topped the Street view. Core sales came under pressure from the adverse market conditions, dragging down the top-line which was also impacted by unfavorable currency exchange rates.
Core sales came under pressure from the adverse market condition, dragging the top-line which was also impacted by unfavorable currency exchange rates
“Sales were at the higher-end of our expectations, operating margins increased as a result of disciplined cost management, normalized EPS was well ahead of our expectations, and operating cash flow was significantly improved versus last year. We have taken decisive action to strengthen performance and those actions are beginning to yield results,” said CEO Michael Polk.
During the quarter, margins and cash flow got a boost from the management’s cost-cutting efforts. The company expects market conditions to improve in the current fiscal year as the headwinds from the Toys’R’ Us bankruptcy and the slowdown in the Writing industry have started easing.
Encouraged by the positive results, the management has guided second-quarter revenues above the consensus estimate – in the range of $2.10 billion to $2.15 billion. Adjusted earnings are expected to be between $0.34 per share and $0.38 per share in the June quarter.
Related: Newell Brands Q4 2018 Earnings Conference Call Transcript
For fiscal 2019, the company forecasts revenues in the $8.2-$8.4 billion range, which is slightly below the market’s projection. The outlook for full-year earnings is $1.50-$1.65 per share.
Shares of Newell witnessed significant volatility in recent years and are currently trading at the lowest level in more than seven years. The stock closed the last trading session notably higher and moved up 2% early Friday after the earnings report.