Why Newell Brands Stock Rallied as Much as 11.5% in Morning Trading

Shares of Newell Brands (NASDAQ: NWL), a widely diversified consumer products company, rose sharply in early trading on Feb. 11, gaining as much as 11.5% at one point. The big news was the company's pre-market fourth-quarter 2021 earnings release. Although investors were clearly pleased, the story wasn't all good.

On the top line, sales increased 4.3% in the fourth quarter of 2021 compared to the year-ago period, hitting $2.8 billion. The company's sales increased in each of its five reporting divisions. Wall Street analysts had been looking for revenue of $2.65 billion. On the bottom line, Newell reported adjusted earnings of $0.42 per share, while analysts had been targeting $0.32. So the company beat on both the top and bottom lines, which investors tend to like.

However, in the fourth quarter of 2020 Newell reported adjusted earnings of $0.56 per share, so earnings actually declined here. The major year-over-year headwind was inflation, including rising costs for materials, labor, and logistics.

Source Fool.com