Upcoming AWS Coverage on Clorox Post-Earnings Results
LONDON, UK / ACCESSWIRE / February 23, 2017 / Active Wall St. announces its post-earnings coverage on Newell Brands Inc. (NYSE: NWL). The Company announced its fourth quarter and fiscal 2016 financial results on February 06, 2017. The consumer product Company met markets earnings estimates. Register with us now for your free membership at:
One of Newell Brands' competitors within the Housewares & Accessories space, The Clorox Co. (NYSE: CLX), reported on February 03, 2017, its Q2 fiscal year 2017 results. AWS will be initiating a research report on Clorox in the coming days.
Today, AWS is promoting its earnings coverage on NWL; touching on CLX. Get our free coverage by signing up to:
For the three months ended December 31, 2016, Newell's net sales soared 165.0% to $4.14 billion compared to $1.56 billion in the prior year, primarily due to the inclusion of net sales from the acquired Jarden business. Core sales grew 2.5% driven by strong results from the Writing, Baby, Home Solutions, and Outdoor Solutions businesses. The Company's sales number came in below market expectations of $4.25 billion. Newell's net sales for the full year ended December 31, 2016, were $13.26 billion, up 124.2% compared to $5.92 billion in the prior year. Core sales increased 3.7%.
For Q4 2016, the Company reported gross margin of 36.8% compared to 38.3% in Q4 2015, as the benefits of synergies, productivity, and pricing were more than offset by negative mix effects related to the Jarden transaction and the deconsolidation of Venezuela, and the adverse impact of foreign currency. Newell's operating income was $513.1 million, or 12.4% in Q4 2016 compared to $101.9 million, or 6.5% of sales, in the prior year's comparable quarter.
For Q4 2016, Newell reported net income of $165.6 million, or $0.34 per diluted share, compared to net income of $13.2 million, or $0.05 per diluted share, in Q4 2015. The contribution from the acquired Jarden business and strong operating income growth on both legacy businesses more than offset the negative impact of increased advertising and promotion investment, foreign currency, increased amortization of intangibles, increased interest expense, a higher tax rate, and a higher share count. Normalized net income was $389.9 million for the reported quarter compared to $151.1 million in the year ago same period. The Company's normalized diluted earnings per share surged 42.9% to $0.80 compared to $0.56 in Q4 2015, thus meeting analysts' consensus estimates. For FY16, Newell's reported net income was $527.8 million compared to $350.0 million in FY15. Reported diluted earnings per share were $1.25 compared to $1.29 in the prior year.
For Q4 2016, Newell generated operating cash flow of $991.5 million compared to $277.7 million in Q4 2015, reflecting the contribution from the Jarden acquisition and improved operating results. For FY16, the Company's operating cash flow was $1.83 billion compared to $565.8 million in FY15. Newell had gross debt of $11.89 billion reflecting a reduction of $855 million during the reported quarter and a $2.06 billion reduction since the creation of Newell Brands on April 15, 2016.
Operating Segment Results
For Q4 2016, Newell's Writing net sales totaled $462.4 million, down 0.8% on a y-o-y basis as solid core sales growth of 4.3% and the benefit of the Elmer's acquisition were offset by the negative impact of foreign currency and the deconsolidation of Venezuelan operations.
The Company's Home Solutions net sales declined 11.5% to $391.0 million in Q4 2016 primarily due to the divestiture of the Décor business. Core sales grew 5.7% largely driven by strong results from the Beverage business and the launch of Rubbermaid Brilliance food storage containers in Food, partially offset by Calphalon's weaker performance in certain mall-based retailers due to lower holiday retail mall foot traffic.
During Q4 2016, Newell's Tools segment's net sales declined 4.6% to $198.1 million driven by the negative impact of foreign currency and ongoing macro-driven slowdown in Brazil. Tools core sales were less than $8.0 million, as the vast majority of the Tools segment is held for sale.
The Company's Commercial Products net sales totaled $208.9 million in Q4 2016 compared to $207.1 million in Q4 2015, as North American sales stabilized despite ongoing planned complexity reduction activity. During Q4 2016, Newell's Baby & Parenting net sales grew 1.6% to $241.7 million, as strong sales momentum in the US was partially offset by the impact of a planned change from a distributor-based selling model to a direct selling model in Canada.
For Q4 2016, Newell's Branded Consumables net sales were $1.10 billion. On a pro-forma basis, net sales decreased 0.1% on a y-o-y basis. Strong growth at Waddington, Yankee Candle International and Yankee Candle ecommerce was partially offset by weaker performance in Yankee Candle's mall-based retail stores due to lower holiday retail mall foot traffic.
Newell's Outdoor Solutions generated net sales of $730.6 million. On a pro-forma basis, net sales increased 3.8% on a y-o-y basis. Pro-forma core sales, which exclude the Winter Sports business that is held for sale, increased 2.9% on a y-o-y basis primarily driven by strong growth in Fishing, Technical Apparel, and Team Sports, partially offset by declines on Coleman related to early 2016 distribution losses. The Company's Process Solutions net sales were $88.9 million. On a pro-forma basis, net sales decreased 0.6% versus prior year.
On February 10, 2017 Newell announced the declaration of a quarterly cash dividend of $0.19 per share. The dividend is payable March 15, 2017, to common stockholders of record at the close of business on February 28, 2017.
For FY17, Newell's net sales guidance range is $14.52 billion to $14.72 billion. The net sales guidance range represents net sales growth of 9.5% to 11.0% on a y-o-y basis. The Company has broadened its 2017 core sales growth guidance range to 2.5% to 4.0% versus its previous guidance of 3.0% to 4.0% reflecting revised expectations on the Company's businesses with larger US mall-based retail presence given lowered expectations for US retail mall foot traffic. Newell has raised its FY17 normalized earnings per share outlook to $2.95 to $3.15 compared to its previous guidance of $2.85 to $3.05.
At the close of trading session on Wednesday, February 22, 2017, Newell Brands' stock price climbed 1.63% to end the day at $47.25. A total volume of 3.31 million shares were exchanged during the session. The Company's share price has surged 26.84% in the past twelve months and gained 5.82% on YTD basis. The stock currently has a market cap of $22.91 billion. Furthermore, the stock is trading at a PE ratio of 40.18 and has a dividend yield of 1.61%.
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