Goldman Sachs Discusses Newell Rubbermaid (NWL)

Goldman Sachs is out with a research report on Newell Rubbermaid NWL after the company reported earnings. It has a Neutral rating on shares. In a note to investors, Goldman writes, "Sales were weak, falling 1.7%. Adjusted for two timing shifts, 1.5% sales growth was short of the company's 4%-5% full-year objective and roughly 200 bp below the consensus. (The two timing shifts were customer pre-buying in 1Q2010 before NWL's SAP implementation and sales pull forward in 4Q2010 for customers qualifying for annual volume rebates). On the plus side, gross margin was up 160 bp to 37.7% as pricing and productivity offset commodity headwinds. This was above our estimate of 36%. The company indicated that it executed fewer promotions in the quarter. This likely played a role both in the sales miss and gross margin beat. The company increased its cash deployment. NWL announced a 60% dividend increase to a $0.32 annualized rate, raising the dividend yield to 1.6%." Shares of NWL are down 46 cents in early Friday trading to $19.27, a loss of over 2%.