Newell Rubbermaid said its sales rose in the second quarter, primarily because of strength in emerging markets in the Latin American and Asian Pacific regions.
Revenue and profits beat Wall Street's lowered expectations, and the company's shares jumped 8 percent on the New York Stock Exchange for their steepest rise this year.
Sales rose 5.1 percent to $1.57 billion, with most of the growth due to the weak dollar. The company earned $146.7 million or 49 cents per share, compared to net income of $130.4 million or 41 cents per share in the same period a year ago.
But higher costs cut into profit margins, and the United States and Europe continue to be weak spots for the parent company of Sharpie and Rubbermaid. The baby and parenting category was one of the main drags on growth and a more difficult turnaround job than expected.
The company said the number of births in the U.S. last year fell to the lowest levels since 2003. Also, young parents or couples starting a family -- customers who buy Graco strollers, car seats and highchairs -- are some of the most economically stressed consumers in the country.
The company lowered its core sales growth to between three and five percent for the second half of the year. Executives said a more conservative view of consumer confidence in the U.S. and Europe contributed to the downward adjustment.
Michael Polk, a Newell Rubbermaid board member since 2009 who was recently named chief executive, said there has been speculation that the company should drop its earnings expectations more dramatically. He said that is not necessary or appropriate.
"We have the people, the brands and the resources required to deliver steady core growth in the 3 percent to 5 percent range," he said on a conference call with analysts.
"The turnaround we expect to deliver will not happen overnight," Polk said. "That said, we have plans to stabilize baby and parenting in the second half of 2011 and believe we can exit the year in growth mode again."
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