Newell Brands Inc. NWL delivered fourth-quarter 2017 results, wherein both earnings and sales surpassed the Zacks Consensus Estimate. However, decline in both top and bottom line did raise some concerns. Nevertheless, management retained its 2018 view.

This Hoboken, NJ-based company posted normalized earnings of 68 cents per share that beat the Zacks Consensus Estimate by a penny but declined 15% year over year from 80 cents reported in the prior-year quarter. Management highlighted that lost contributions from divested operations, fall in core sales volume, adverse pricing, and commodity cost inflation coupled with increased share count hurt the bottom line. These were partly mitigated by ongoing cost savings and related synergies, contributions from acquisitions and lower tax rate.

Net sales of $3,743.1 million came ahead of the Zacks Consensus Estimate of $3,716 million but declined 9.5% year over year on account of the adverse impact from divestitures, net of buyouts. Core sales fell 1.9%. E-commerce sales worldwide surged more than 25% during the quarter under review, and now represent 11% of net sales.

Normalized gross margin contracted 420 basis points to 33% during the quarter. Meanwhile, normalized operating margin shriveled 290 basis points to 13.4% in the quarter under review.

We noted that shares of Newell are up roughly 2.6% during pre-market trading session following better-than-expected results. However, shares of this Zacks Rank #5 (Strong Sell) company have declined 44.9% in the past six months, wider than the industry’s decline of 11.6%.

Segment Performance

Live segment net sales increased 2.7% to $1,724.8 million from the year-ago period. However, core sales decreased 1.8% on account of soft results from Appliances and Baby, partly offset by growth in Home Fragrance and Fresh Preserving.

Net sales at Learn segment came in at $551 million, down 8.9% from the prior-year period. Core sales fell 9.7% due to double-digit decline in Writing, partially offset by growth from Jostens.