Newell Net Falls 24 Percent in Second Quarter
ATLANTA-A decline in sales coupled with a significant income-tax increase slashed into Newell Rubbermaid's bottom line in the second quarter.
Net income for the diversified manufacturer fell 23.8 percent to $111.8 million for the quarter, which ended on June 30. Net sales were down 1.9 percent to $1.5 billion, mostly due to change in foreign currency rates. Income-tax expense more than doubled to $52.5 million, due to a more-than-doubling of the effective income-tax rate to 32 percent.
Newell Rubbermaid was able to keep its expenses in line during the quarter. Selling, general and administrative expenses, although rising by 30 basis points as a percentage of sales to 25.4 percent, were slimmed 0.7 percent. Gross margin benefited from a 0.5 percent decline in cost of goods sold to finish at 38.3 percent, 50 basis points ahead of last year's second quarter.
Michael Polk, the company's president and CEO, called it a "solid second quarter." Polk said Newell Rubbermaid's Parent & Baby segment posted "strong core sales growth," as did its emerging-markets sector. "(W)e believe our portfolio is well positioned to meet our financial and strategic goals for the year," Polk said.