February 16, 2018 / 12:03 PM / a month ago

UPDATE 2-Newell edges past estimates, helped by fragrances and containers

(Adds details on investor pressure, CEO comment, fourth quarter, share move)

By Karina Dsouza

Feb 16 (Reuters) - Newell Brands Inc, which is under pressure from activist investor Starboard Value, reported better-than-expected quarterly results and forecast current-quarter sales and profit ahead of estimates, buoyed by demand for its food containers, fragrances and sporting goods.

The company’s shares, which have fallen 42 percent in the past one year, rose 4 percent in premarket trading on Friday.

The results come a few days after Starboard said in a letter it was seeking to replace Newell’s entire board and oust its CEO, expressing concerns over the company’s underperformance. The hedge fund also said that Newell had mismanaged the integration of its 2016 acquisition of Jarden Corp.

Starboard’s concerns stem from a transformation plan Newell announced in January that calls for shrinking the number of the company’s factories and warehouses as well as its customer base to save $6 billion.

It is also paring down to its core by jettisoning 10 business lines, many of which it acquired through the Jarden buyout including Rawlings and Goody.

Newell has declined to comment specifically on Starboard’s concerns since the investor’s letter, but said that its board was committed to continuously reviewing its capabilities and ongoing refreshment on behalf of shareholders.

“We had a particularly good outcome on cash flow but work to do on our other metrics,” Michael Polk, Newell Brands’ chief executive officer, said in the company’s earnings statement on Friday.

Revenue in Newell’s biggest business, Live, which sells home fragrances and food containers, rose 2.7 percent. Sales in its Play segment, which sells sporting items, increased 6.6 percent.

However, Newell’s Learn business, which sells the memorabilia brand Jostens, reported an 8.9 percent decline, in part due to a dispute with a prime customer who halted shipments of its writing products in the quarter.

Newell forecast net sales of $14.4 billion to $14.8 billion and an adjusted profit of $2.65-$2.85 per share for 2018.

The midpoint of these forecast ranges were above the analyst average estimate of $2.71 per share for earnings and $14.41 billion for sales, according to Thomson Reuters I/B/E/S.

Net income rose to $1.65 billion, or $3.38 per share in the fourth quarter ended Dec. 31, from $165.6 million, or 34 cents per share, a year earlier, helped by a tax benefit of $1.45 billion.

Excluding items, Newell earned 68 cents per share, 1 cent above estimates.

Net sales fell 10 percent to $3.74 billion, but beat estimates of $3.69 billion. (Reporting by Karina Dsouza and Nivedita Balu in Bengaluru; Editing by Bernard Orr and Maju Samuel)

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