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Newell Brands (NWL) Queued for Q1 Earnings: What's in Store?

·4 min read
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Newell Brands Inc. NWL is likely to register an increase in the top line when it reports first-quarter 2021 numbers on Apr 30, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $2,064 million, indicating an improvement of 9.4% from the prior-year reported figure.

The bottom line of this leading global consumer goods company with a robust portfolio of well-known brands such as Rubbermaid, Paper Mate and Sharpie is also expected to increase year over year. The Zacks Consensus Estimate for earnings for the quarter under review has been stable at 14 cents in the past 30 days. The figure suggests a sharp improvement from earnings of 9 cents reported in the year-ago period.

Notably, this Atlanta, GA-based company has a trailing four-quarter earnings surprise of 56.1%, on average. In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by a significant margin of 16.7%.

Factors to Note

Newell Brands focus on lowering complexity, improving productivity, enhancing e-commerce growth and deepening customer engagement are likely to have favorably impacted first-quarter performance. Endeavors including strengthening of brands, developing omnichannel capabilities, tapping international growth opportunities and reducing overhead costs also appear encouraging.

Notably, the company has been witnessing sales growth in few categories, namely Food, Commercial and Appliances. Gains from these are likely to get reflected in the company’s top line.

In fact, management on its last earnings call highlighted that the first quarter commenced on a strong note from both a consumption and shipment perspective. Notably, Newell Brands projected first-quarter net sales between $2.04 billion and $2.08 billion, indicating year-over-year growth of 8-10% with core sales anticipated to increase in the high single-digit range. It forecasted normalized earnings in the band of 12-14 cents a share, which suggests double-digit growth on a year-over-year basis.

The company also guided normalized operating margin expansion of 90-130 basis points year over year to 6.9-7.3%. This reflects benefits from productivity efforts as well as overhead cost and complexity reduction. However, higher advertising and marketing investments along with increased commodity and transportation costs might have weighed on margins to an extent.

Newell Brands Inc. Price, Consensus and EPS Surprise
Newell Brands Inc. Price, Consensus and EPS Surprise

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Newell Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Although Newell Brands carries a Zacks Rank #3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Sanderson Farms SAFM has an Earnings ESP of +3.13% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The J. M. Smucker Company SJM has an Earnings ESP of +1.49% and a Zacks Rank #3.

Sysco Corporation SYY has an Earnings ESP of +5.00% and a Zacks Rank #3.

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Newell Brands Inc. (NWL) : Free Stock Analysis Report

The J. M. Smucker Company (SJM) : Free Stock Analysis Report

Sanderson Farms, Inc. (SAFM) : Free Stock Analysis Report

Sysco Corporation (SYY) : Free Stock Analysis Report

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