Newell Rubbermaid's Q2: Market Wasn't Too Excited

Posted Jul 31st 2010 11:40AM by Steven Mallas
Filed under: Earnings Reports, Newell Rubbermaid (NWL)

Last time I wrote about Newell Rubbermaid (NWL), in a piece published way back in January, I was a bit too conservative on the stock's short-term prospects. As this chart will show, the shares eventually rose for a while after the fourth-quarter report was released.

However, they have pulled back somewhat from the 52-week high of $17.96. The company closed Friday's session at a price of $15.50, representing a very modest decline in reaction to the second-quarter earnings numbers that were released before the market was open for business.

I'm surprised to some degree by the lackluster close. The Q2 stats weren't bad. The adjusted profit of 51 cents per share beat projections by seven solid pennies. In addition, guidance for the full year on an adjusted basis was slightly raised: management now believes its operations will bring in somewhere between $1.40 and $1.50 per share. Both the lower and higher ends of the latter range were raised by two pennies.

Honestly, I can't get excited over Newell Rubbermaid as an investment idea right now. I just didn't like yesterday's weak price action. While the company could be a good holding for the long term, I normally think of this one as a trade. For me to become excited over its trading prospects, I would want to see a better dip. Until then, I'll give it a pass.

Disclosure: I don't own any company mentioned; positions can change without notice.

Tags: inthenews, newell rubbermaid, NWL