ATLANTA–The drop in consumer spending and the sagging economy resulted in a deep income and sales drop for the fourth quarter for Newell Rubbermaid, the company reported. Net income fell to a negative $256.7 million, or a negative 17.7 percent of sales, for the quarter ended December 31, 2008, compared to the prior year. Consistent with the updated guidance provided by the company, net sales declined 11.6 percent to $1.45 billion in the fourth quarter, compared to $1.64 billion in 2007.
“Our results reflect the dramatic downturn in the global economy during the last two months of 2008,” said Mark Ketchum, president and chief executive officer. “Weakness in consumer spending, compounded by inventory reductions at retail, negatively impacted both sales and productivity.”
The company also announced a 50 percent reduction in its quarterly dividend to $0.105 per share. The board anticipated maintaining this dividend rate throughout the year, for an annualized dividend level of $0.42 per share.
“The board’s decision to reduce the dividend is prudent in order to better position our company to protect its investment grade credit rating and maintain continuing access to credit markets,” said William Marohn, chairman, in a statement. “We fully recognize that the dividend is an important element of return for shareholders, and we did not take the decision to reduce it lightly. However we strongly believe this decision is in the long-term best interest of the shareholders and the company.”