Earnings Preview: Newell Rubbermaid

| About: Newell Brands (NWL)

Newell Rubbermaid (NYSE:NWL) is expected to report Q4 earnings before market open Thursday, January 29, with a conference call scheduled for 9:00 am ET.


Analysts are looking for a profit of 8c on revenue of $1.43B. The consensus range is 6c-9c for EPS, and revenue of $1.41B-$1.45B, according to First Call. In December, the company lowered its Q4 EPS guidance to 6c-10c from 29c-34c and lowered FY08 EPS guidance to $1.17-$1.21 from $1.40-$1.45 vs. First Call consensus of $1.19. In order to reduce costs, Newell announced actions that includes an 8%-10% reduction of the salaried workforce, a wage and salary freeze and temporary shutdowns at a number of manufacturing facilities in order to reduce inventory levels.

While the company does produce a number of products that are deemed recession-proof, the company said it has seen "extraordinary volatility, weaker than expected demand and customer inventory reductions" across virtually all geographies and markets segments. The company notes that trends worsened at the end of Q4. Analysts and investors will listen closely for comments on the company's cost-cutting measures, additional plans and how it views the business environment in 2009.

Analyst Views

Banc of America/Merrill Lynch recently downgraded the stock to Neutral from Buy, citing higher interest expenses and low visibility into a sales recovery. The firm expects Newell Rubbermaid to cut its dividend and said the company's BBB+ credit rating on negative watch will be a deterrent for buyers.