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UPDATE 2-Energizer to spin off household business next July
July 30, 2014 / 12:20 PM / 3 years ago

UPDATE 2-Energizer to spin off household business next July

* Keeps full-year adj profit forecast of $7-$7.25/share

* 3rd-qtr net income falls 24 pct to $64.5 mln

* 3rd-qtr revenue rises 1.7 pct to $1.13 bln

* Shares rise as much as 5.3 pct (Adds conference call comments, outlook, shares)

July 30 (Reuters) - Energizer Holdings Inc said it intends to spin off by next July its struggling household products business, which includes Energizer and Eveready batteries.

Shares of the company, which reported an 11 percent sales growth in its largest personal-care business, rose as much as 5.3 percent in early trading.

The company said in April it would split into two publicly traded companies - one for household products and the other for personal care products such as Schick razors and Banana Boat sunscreen lotions.

Energizer said on Wednesday it expects sales in the household products business to stabilize in the fourth quarter as it raises spending on advertising and marketing.

Sales of Energizer’s household products have been falling for a year after Wal-Mart Stores Inc’s warehouse unit Sam’s Club and discount store chain Family Dollar Stores Inc ended contracts with the company.

Energizer does not make batteries for devices such as tablets and smartphones, which has hurt its sales as demand for rechargeable batteries bundled with mobile devices rises.

The business’s contribution to total revenue slid to $411.7 million, or 36 percent of overall sales, in the third quarter, compared to about 45 percent last year.

The company said on Wednesday it would spin off the business, which also sells portable lights, in a tax-free transaction to shareholders.

Energizer also maintained its full-year adjusted net income forecast of $7-$7.25 per share.

Analysts on average were expecting $7.08 per share.

Net income for the third quarter fell to $64.5 million, or $1.03 per share, from $87.2 million, or $1.38 per share, a year earlier.

Excluding items, Energizer earned $1.46 per share, missing the average analyst estimate of $1.55, according to Thomson Reuters I/B/E/S.

Increased advertising and promotional spending and a higher tax rate hurt earnings.

Revenue rose 1.7 percent to $1.13 billion, beating the average estimate of $1.12 billion.

Sales from its personal care business were helped by strong demand for women’s razors and sunscreen products. It expects personal care sales to be flat in the fourth quarter.

Energizer’s shares were up 3 percent at $118.54 on the New York Stock Exchange on Wednesday. (Reporting by Ramkumar Iyer in Bangalore; Editing by Joyjeet Das and Don Sebastian)

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