Newell Brands (NWL +12%) is trading at a seven-month high after reporting better than expected first quarter results and raised guidance.
Net sales rose 134% to $3.3 billion due to the company's acquisition of Jarden last year. Core sales grew 2.5%, in-line with last quarter.
Normalized earnings per share of $0.34 compared with $0.40 in the prior year, as the benefits of increased sales and operating profitability were more than offset by higher interest expense and higher share count associated with the Jarden transaction.
Chief Executive Michael Polk: "Our Core sales results were broad based with growth in all four regions and across four of five segments. Our international growth coupled with very strong e-commerce results more than offset the continuing impact of inventory de-stocking in U.S. mass channels. Our operating margin was well ahead of plan driven by strong cost synergies and stringent discretionary cost management. And we further deleveraged, paying down over $725 million of debt in the quarter, bringing our cumulative debt repayment since the Jarden transaction on April 15, 2016 to $2.8 billion."
Newel raised earnings guidance for fiscal 2017 to $3.00-3.20 from $2.95-3.15 per share and reaffirmed sales up 9.5-11.0% with core sales up 2.5-4.0%.
Newell also raised its quarterly dividend 21% to $0.23/share, giving the stock a ~1.8% dividend yield.
Newell owns many well-known consumer goods brands such as Paper Mate, Sharpie, Elmer's, Coleman, Rawlings, Oster, FoodSaver and Graco.
Newell has a ~$25 billion market cap and trades at ~17x adjusted earnings estimates for 2017. That is a premium to Tupperware (TUP) at ~15.5x