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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E*Trade shares tumble 11 percent after soft results

E*Trade shares tumble 11 percent after soft results

Stock Market Predictions

(Global Markets) - Shares of E*Trade Financial (ETFC.O) tumbled 10.7 percent after the company reported a surprising loss late on Wednesday, due to higher-than-expected loan provisions in its troubled banking unit and a slowdown in trading levels.

The online brokerage and financial services company's shares tumbled 11.6 percent, or $1.09, to $8.25 in morning trading

E*Trade reported a net loss of $6.3 million, or 2 cents a share in the fourth quarter, compared with a loss of $24 million, or 11 cents, a year earlier.

Analysts on average expected the company to earn 20 cents a share, according to Thomson Global Markets I/B/E/S.

The company said it has been transitioning since the second half of 2011 to a new banking regulator, and to bring its programs in line, it took a $15 million writedown to adjust for loans that were currently in foreclosure, and it added $67 million to its reserves.

In total, E*Trade said it set aside $123 million for loan losses in the quarter, compared with $194 million a year earlier.

David Chiaverini, an analyst at BMO Capital Markets, said he had been expecting the company to record $48 million in loan loss provisions.

E*Trade took billions of dollars in losses on risky loans in the mortgage portfolio of its banking unit following the collapse of the U.S. housing market. It has made progress with its debt and credit issues, chalking up its first full-year profit since 2006, but the loan book continues to drag on earnings.

Separately, the company paid about $11 million in the quarter to settle a class-action lawsuit as a result of losses in its mortgage and home equity loans portfolio in 2007.

Minus the one-time charges, E*Trade would have likely earned just under 17 cents a share, Richard Repetto, an analyst at Sandler O'Neill Research, said in a note to clients.

Daily client trades at the brokerage were down 7 percent from a year ago as investors pulled back from choppy markets. E*Trade also said its net interest margins would fall below its earlier forecasts in 2012 due to the ongoing soft interest rate environment.

While Repetto said he believes E*Trade management "is doing all the right things," he downgraded the stock to "hold" from "buy" due to the difficult trading environment and net interest margin compression.

Goldman Sachs cut E*Trade to "neutral" from "buy," while Macquarie cut its price target for the firm to $8 from $10, and BMO Capital Market cut its price target to $8 from $9.

(Reporting By John McCrank in New York; Editing by Derek Caney and Maureen Bavdek)

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GE ups dividend for fourth time in 18 months

GE ups dividend for fourth time in 18 months

Stock Market Predictions

(Global Markets) - General Electric Co (GE.N) said on Friday it is raising its quarterly dividend by 13 percent, marking the fourth time the largest U.S. conglomerate has increased the payout since July 2010 and sending its shares up 3.6 percent.

The series of increases -- totaling 70 percent -- were intended to signal that the world's largest maker of jet engines and electric turbines had recovered from the 2008-2009 financial crisis, when it slashed its payout to conserve cash.

But Chief Executive Jeff Immelt has cautioned investors that the Fairfield, Connecticut-based company aims to return to its historic practice of raising the dividend once per year, in line with earnings growth. GE aims to pay out 45 percent of earnings to shareholders through the dividend.

"Our balanced and disciplined capital allocation plan has enabled us to achieve important goals including increasing dividends, redeeming the preferred stock held by Berkshire Hathaway, redeploying our (NBC Universal) capital to high growth energy acquisitions and investing in organic growth platforms," Immelt said in a statement.

GE's board voted to raise the quarterly dividend by 2 cents per share, to a rate of 17 cents, payable on January 25. It remains below the 31 percent pre-financial-crisis rate.

GE shares were up 3.6 percent to $16.89 in midday trading on the New York Stock Exchange.

When the company reported third-quarter results, it told investors it expects to grow profit at a double-digit rate next year. While Immelt is likely to offer more detail on the company's expectations in a meeting with investors on Tuesday, GE no longer provides shareholders with specific per-share profit targets, a practice it abandoned during the financial crisis.

GE in October bought back the preferred stake it had sold to Warren Buffett's Berkshire Hathaway Inc (BRKa.N) for $3.3 billion plus unpaid dividends.

(Reporting by Scott Malone in Boston; Editing by Derek Caney, Dave Zimmerman)

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Heinz sales miss; updates forecast assumptions

Heinz sales miss; updates forecast assumptions

Stock Market Predictions

(Global Markets) - H.J. Heinz Co (HNZ.N) is turning to smaller, less-expensive packages for its namesake ketchup and sauces and bringing baked beans back to the U.S. market as it tries to generate more sales in a tough economy.

The moves come as the foodmaker posted weaker-than-expected quarterly sales and lowered its expectation for its full-year gross margin. Its shares fell 3 percent.

The maker of Heinz ketchup, Ore-Ida frozen potatoes and other packaged foods cited sales weakness in Australia and its U.S. foodservice business, which it said hasn't recovered as quickly as expected.

In an effort to adapt to a more difficult operating environment, particularly in developed markets, Heinz said it will close three more factories around the world in addition to closings it already announced.

The closings will cost the company 15 cents more per share this year, on top of one-time charges of 35 cents per share already announced.

Heinz will also introduce a range of smaller-size, less expensive products in the United States that will give it a bigger presence in dollar stores, where cash-strapped consumers are doing more of their food shopping.

"Developed markets are experiencing low consumer confidence, high unemployment and economic uncertainty," said Heinz Chief Executive William Johnson.

Heinz's quarterly profit beat expectations by a penny, but it did not raise its full-year forecast. The earnings forecast also now relies on a lower tax rate than previously thought.

"Heinz trades at a premium to the group, and these are not premium results," said RBC Capital Markets analyst Edward Aaron.

The company's shares were down $1.68, or 3.2 percent, at $51.14 in late morning trading.

$1 KETCHUP, $2 FRIES

Heinz said net income fell to $237 million, or 73 cents per share, in its fiscal second quarter, ended on October 26, from $251.4 million, or 78 cents per share, a year earlier.

Excluding items, it earned 81 cents per share. On that basis, analysts on average were expecting 80 cents per share, according to Thomson Global Markets I/B/E/S.

Sales rose 8 percent to $2.83 billion, but fell short of analysts' average estimate of $2.91 billion.

Sales, excluding the effect of acquisitions and foreign exchange, rose 1.5 percent, as a 2.9 percent decline in volume partly offset a 4.4 percent benefit from higher prices.

To appeal to U.S. consumers with tight grocery budgets, Heinz is launching a 10-ounce pouch of ketchup for 99 cents, a nine-ounce package of mustard for 99 cents and a one-pound package of Ore-Ida French fries for $1.99.

CEO Johnson said the smaller packages are expected to boost sales since they should appeal to consumers who were not buying Heinz' products before, such as dollar store shoppers. They should also be largely neutral or beneficial to its profit margins, he said.

In addition, Heinz is bringing back its canned baked beans to the U.S. market after an absence of several decades.

"We believe this is the right time for the return of this convenient, nutritious, and value-oriented classic," Johnson said. "Consumers have been turning to comfort foods during the recession.

The company said it is on track to meet its goal for fiscal 2012 earnings of $3.24 to $3.32 per share, excluding items.

But compared with its assumptions in May, when it first gave the forecast, Heinz said it now expects a lower gross margin, due to higher commodity inflation and weak sales in Australia and U.S. Foodservice, offset by stronger results in emerging markets and Britain, reduced discretionary spending, lower interest expense and a lower tax rate.

In the latest quarter, sales from emerging markets rose nearly 16 percent organically and accounted for 20 percent of total sales.

Heinz said higher costs for ingredients like beans, sweeteners and packaging led to a 10 percent increase in costs in the second quarter, which it said was the "high water mark" for the year. It forecast a full-year commodity cost increase of 7.5 percent.

(Reporting by Martinne Geller; Editing by Derek Caney, Steve Orlofsky and Gunna Dickson)

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