Newell Rubbermaid Inc. (NYSE: NWL), the maker of Sharpie markers, Calphalon kitchenware and Rubbermaid home containers, reported third-quarter net income of $108.3 million, or 37 cents a share, below estimates.
But the company also announced a 50 percent dividend hike as well plans to fire about 10 percent of its global workforce of 20,000 as part of a 30-month restructuring plan to save as much as $215 million by 2015.
The news sent shares of Atlanta-based Newell up as much as 5.6 percent to $21.23, a 52-week high, before easing to $21.02, up 93 cents, in Friday trading.
Newell’s adjusted earnings per share – earnings before charges mainly related to the restructuring effort – beat estimates.
Third-quarter revenue fell about 1 percent to $1.54 billion, but core sales that exclude changes in currency values rose 1.5 percent. Analysts polled by Thomson Reuters had expected earnings of 44 cents per share on revenue of $1.54 billion.
Its consumer segment, which represents the majority of revenue, dropped 2 percent to $814.6 million. But the baby and parenting segment, which makes up about 12 percent of total sales, gained 5.2 percent on strong performance of the Graco brand in North America and the Aprica brand in Japan.
Newell also announced leadership changes and a new structure that will divide the company in half, into a delivery organization and a development one.
The head of the company’s professional brands division, William A. Burke, was named chief operating officer and will head the product delivery group.
Former Unilever N.V. (NYSE:UN) executive Mark Tarchetti will head development, which will have six segments instead of nine. They are: commercial products, tools, baby and parenting, home solutions, writing and specialty
"The structural and leadership changes we are announcing today are bold steps that are critical to unlocking our full growth potential," said CEO Michael Polk.
Part of the restructuring includes firing 1,900 employees in an effort to maintain shareholder dividends and market value while cutting costs, the company said.
Newell also upped its quarterly dividend by a nickel, to 15 cents per share.