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Newell Brands: S&P 500’s Top Loser on November 2

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Top losers

The S&P 500’s top losers on November 2 were:

  • Newell Brands (NWL) fell 26.8%.
  • Flowserve (FLS) fell 11.0%.
  • Discovery Comm (DISCK) fell 10.1%.
  • Discovery Comm A (DISCA) fell 9.7%.
  • Hanesbrands (HBI) fell 8.8%.

Newell Brands 

Newell Brands, which is an American worldwide marketer of consumer and commercial products, was the S&P 500’s top loser on Thursday. On November 2, Newell Brands opened the day lower and fell to the lowest levels traded since June 2014.

Lower 3Q17 net sales

The selling pressure in Newell Brands increased on Thursday following the release of its weaker-than-expected 3Q17 results. According to management, the net sales in the third quarter were $3.678.2 billion. It’s less than the market’s expectation of $3.702 billion and a decline of 7% from the net sales recorded in 3Q16. According to management, the lower domestic sales in Rubbermaid storage equipment, Paper Mate pens, and Sharpie markers due to the start of key back-to-school season weighed on the net sales in 3Q17. The sentiment in Newell Brands was weaker on Thursday, which accelerated the selling.

The normalized EPS (earnings per share) in the third quarter was $0.86, which is less than the market’s forecast of $0.92. However, it’s an increase from $0.78 recorded in 3Q16. Despite a decline in net sales, the earnings growth is due to cost-saving measures, project renewals, and acquisitions amid the favorable tax rate.

Guidance

Management lowered its 2017 guidance by changing the expected range for the fiscal EPS from $2.95–$3.05 to $2.80–$2.85. According to management, the lower guidance was due to the lower resin supply amid Hurricane Harvey in September. On November 2, Newell Brands fell 26.8% and closed the day at $30.01.

In the next part of this series, we’ll discuss how Flowserve (FLS) performed on November 2.

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