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Rubbermaid bouncing back with another solid quarter

Posted Jan 30th 2007 2:15PM by Eric Buscemi (RSS feed)
Filed under: Earnings Reports, Good news, Newell Rubbermaid (NWL)

Newell Rubbermaid Inc (NYSE: NWL) reported another very solid quarter under the reign of CEO Mark Ketchum. Newell grew organic revenue 4.7% before the impact of the DYMO acquisition. Including the DYMO acquisition, revenue grew 8.5% -- very solid numbers for a company that has struggled with revenue growth for a long time.

Guidance Highlights:

Ketchum expects organic growth to continue
Resin costs, a big expense for Newell, should continue to moderate and begin benefiting the company
Costs savings to continue which should lead to gross margin expansion
Expects lower double digit operating income growth

Newell, who has been in the investors' doghouse for years, is beginning to perform well, both in terms of operating performance and share price. The stock has had a good run increasing from $22 to $30 during the past year. The stock might pull back due to Newell re-investing in its business at the SG&A line which might impact 1Q07 results. I would use any of this price weakness to get into this stock.