Newell Rubbermaid Swings to a Loss

Newell Rubbermaid ( NWL) shares were lower Thursday after the company said it swung to a first-quarter loss from a profit a year ago, as charges from divestitures took a big bite out of results.

The company also forecast second-quarter and full-year earnings before charges within the range of analysts' projections.

In the first quarter, Newell lost $74.9 million, or 27 cents a share, compared with a profit of $126.4 million, or 46 cents a share, a year earlier. The company had a pretax restructuring charge of $22.8 million from severance and exit costs as well as a $4.1 million pretax charge from other product line exits. The company had a loss of $108 million from divestitures of non-core businesses, shown as discontinued operations.

Excluding restructuring-related charges, net income from continuing operations fell to $51.5 million, or 19 cents a share, from $73.6 million, or 27 cents a share, in the year-earlier period. On that basis, analysts were expecting 18 cents a share.

Sales dropped slightly to $1.5 billion from $1.6 billion a year ago.

The Atlanta-based company said it has made progress in its plan to rework its portfolio and rid itself of underperforming and low-margin businesses to focus on its core business. "During the quarter we completed the bulk of our divestiture plan and also exited approximately $60 million in sales of low-margin product lines. We are also on track to record the remaining charges related to our restructuring plan in the second quarter," Newell Rubbermaid said.

Looking to the second quarter, the company expects sales to fall 1% to 3% and earnings to be 34 cents to 38 cents a share, excluding restructuring charges. Analysts are expecting 37 cents a share.

For the full-year 2004, the company forecast earnings, excluding charges, of $1.36 to $1.46 a share. The Wall Street consensus is for $1.38 a share.

The company expects to lose $108 million to $113 million, or 39 cents to 40 cents a share, from discontinued operations earnings.

Shares of Newell Rubbermaid were lately down $1.13, or 4.6%, at $23.68. They are down about 19% from a year ago.

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