Newell profit tops estimates; raises dividend

Newell profit tops estimates; raises dividend

Stock Market Predictions

NEW YORK (Global Markets) - Newell Rubbermaid Inc's (NWL.N) quarterly profit beat Wall Street expectations on strength in emerging markets and price increases.

The maker of Sharpie pens and Rubbermaid storage containers said it was on track to meet its full-year outlook and will raise its quarterly dividend by 60 percent to 8 cents a share. Its shares were up 1.3 percent at $19.99 in premarket trading on Friday.

Newell has raised prices of some products to offset rising oil and resin costs. Makers of everything from soap to diapers have said they will pass on some costs to shoppers. Procter & Gamble (PG.N) sees its costs soaring about three times as much at it had anticipated earlier.

Newell's first-quarter net profit rose to $75.7 million, or 25 cents a share, from $58.4 million, or 19 cents a share, a year earlier.

Excluding items, it earned 30 cents a share, beating the analysts' average estimate of 28 cents, according to Thomson Global Markets I/B/E/S.

Sales fell 0.3 percent to $1.30 billion, while analysts expected $1.33 billion. Sales in developing markets, where the company has substantially increased its investment, rose double digits in the first quarter. U.S. sales fell 4 percent as bargain-hungry shoppers traded down and the company cut back on discounts.

"While sales were a bit light, we think Newell will be able to adjust its offering relatively quickly," BMO Capital markets analyst Connie Maneaty said, highlighting Newell's plans to launch more "value-priced" options and step up promotions.

Newell repeated its 2011 profit forecast of $1.67 to $1.70 a share, excluding items. It also backed its core sales growth outlook of 4 to 5 percent and gross margin forecast calling for an improvement of 0.5 to 0.75 percentage point.

(Reporting by Dhanya Skariachan; Editing by Lisa Von Ahn, Derek Caney, Dave Zimmerman)

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Estee Lauder raises ad spending

Estee Lauder raises ad spending

Stock Market Predictions

(Global Markets) - Cosmetics company Estee Lauder Cos Inc (EL.N) forecast quarterly earnings far below Wall Street estimates, saying it suffered because of foreign exchange rates and would increase investments in advertising, sending its shares down as much as 8 percent.

This would be the first profit miss in more than a year for the company, whose full-year outlook also fell short of analysts' expectations.

Estee Lauder said on Friday that it expected to earn between 28 cents and 32 cents a share after taking a restructuring charge in the third quarter, while analysts on average were expecting the company to earn 41 cents a share, according to Thomson Global Markets I/B/E/S.

The maker of Bobbi Brown, MAC and Clinique brands of beauty products said it would raise global advertising spending by about $80 million, or 14 cents a share, as it introduces new products during the quarter.

"While some of this step-up was likely already anticipated in guidance, we note significant reinvestment in the second half of the year has led to strong first half sales results in recent years, a trend we expect to continue," said Stifel Nicolaus analyst Mark Astrachan.

Chief Executive Fabrizio Freda said on a conference call that Clinique makeup sales in North America grew 13 percent in the second quarter, confirming that its advertising was able to draw new consumers.

For the full year, New York-based Estee Lauder forecast earnings of $2.16 to $2.23 a share, while analysts were expecting $2.26.

"We recommend that investors buy on any weakness tied to the third-quarter guidance, as investment spending in this quarter should lead to stronger sales and earnings growth in the future," BMO Capital Markets analyst Connie Maneaty wrote in a note to clients.

For the second quarter ended December 31, the company posted a higher profit as strong demand for its makeup and skin-care products lifted sales.

Net income at the company, which competes with L'Oreal SA (OREP.PA) and Avon Products Inc (AVP.N) among others, rose to $396.7 million, or $1.00 a share, from $343.9 million, or 86 cents a share, a year earlier.

Excluding special items, the profit of $1.01 a share was in line with the analysts' average forecast.

Estee Lauder shares were trading down 4 percent at $56.41 Friday morning on the New York Stock Exchange.

(Reporting by Phil Wahba in New York and Nivedita Bhattacharjee in Chicago; Editing by John Wallace, Lisa Von Ahn, Phil Berlowitz)

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