Newell Brands Inc. (NASDAQ: NWL) reported a 32% dip in earnings for the second quarter due to lower income from discontinued operations. However, the results exceeded analysts’ expectations. Further, the company guided third-quarter revenue and earnings above the Street’s view.
Net income plunged by 32% to $89.8 million while EPS decreased by 22% to $0.21 per share on lower weighted average common shares outstanding. Normalized earnings fell by 42% to $0.45 per share.
Net sales declined by 4% to $2.1 billion, due to the impact of foreign exchange a 1.1% decline in core sales.
Looking ahead into the third quarter, the company expects net sales in the range of $2.42 billion to $2.47 billion and normalized earnings in the range of $0.55 to $0.60 per share. Core sales are anticipated to decline by 2% to 4%.
For the full year 2019, the company lifted its net sales outlook to the range of $9.1 billion to $9.3 billion from the previous range of $8.2 billion to $8.4 billion. Normalized EPS is still predicted to be $1.50 to $1.65. Operating cash flow guidance is raised to the range of $600 million to $800 million from the prior range of $300 million to $500 million.
The company announced its decision to retain the Rubbermaid Commercial Products business, which has previously been included in discontinued operations. The addition of Rubbermaid Commercial Products to the continuing operations portfolio will be accretive to operating margins, normalized EPS and operating cash flow in 2020 and future years.
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The decision to retain Rubbermaid Commercial Products business was based on the strength of the brand, its competitive position, and strong cash flow generation. Beginning in the third quarter, the financial results of the Rubbermaid Commercial Products business will be reflected in continuing operations, rather than recorded in discontinued operations.
The company announced its decision to move its corporate headquarters to Atlanta, Georgia, in order to facilitate a stronger connection between senior leaders and the operations of the business and to enhance the company’s culture and sense of community. Three of Newell’s seven operating divisions (Writing, Baby and Food) are based in Atlanta.
Shares of Newell ended Thursday’s regular session down 5.36% at $13.43 on the Nasdaq. Following the earnings release, the stock advanced over 6% in the premarket session.