ATLANTA–Newell Rubbermaid revised its outlook for the fourth quarter, based on the continuing economic troubles and the impact that it’s had on its retail partners. Newell is now estimating its fourth-quarter normalized earnings to be between 6 cents to 10 cents per diluted share, compared with its previous guidance of 29 cents to 34 cents per diluted share. For the full year of 2008, it expects normalized earnings of between $1.17 and $1.21 per diluted share, instead of the previous guidance of $1.40 to $1.45 per diluted share.
In addition, net sales for the fourth quarter are expected to show a year-over-year decline in the low teens percentage range, the company said in a statement. As previously guided, however, the company anticipates it will generate full-year operating cash flow of $375 million to $400 million.
“We are seeing extraordinary volatility, weaker than expected demand and customer inventory reductions across virtually all geographies and market segments, with trends worsening as we near the end of our fourth quarter,” said Mark Ketchum, president and chief executive officer. “The unprecedented rapidity of the economy’s decline makes it difficult to anticipate an economic rebound any time soon. Therefore, we will be taking additional measures to better position the company for a prolonged downturn, by further reducing costs and maximizing cash.”
These actions include an 8 to 10 percent reduction of salaried work force, a wage and salary freeze, and temporary shutdowns at a number of manufacturing facilities to reduce inventory levels.
The company also announced the departure of James Roberts, who resigned as executive group president of the Office Products and Cleaning, Organization & Decor segments. His responsibilities will be handled by Ketchum for the interim basis. “We thank Jim for his contributions to Newell Rubbermaid and wish him well in his new endeavors,” Ketchum said. Roberts joined the company in 2001.