Newell Brands blames Harvey for profit warning

Newell Brands, the maker of Rubbermaid containers, Graco car seats and Paper Mate pens, suffered the largest declines on the S&P 500 on Wednesday after the company warned that Hurricane Harvey had disrupted its supply chain.

The company said the storm had affected its resin suppliers with facilities in Texas and Louisiana, with some shut down for more than a week and others still not up and running.

Newell Brands said it now expected full-year 2017 adjusted earnings of between $2.95 and $3.05 a share, down from a previous forecast as high as $3.20 a share.

Wall Street analysts had expected the New Jersey-based company to report adjusted earnings of $3.09 a share for the year. Its shares fell 4 per cent.

“The tragic events that have unfolded in Texas and Louisiana related to Hurricane Harvey have resulted in a significant disruption to a large part of the US resin manufacturing supply chain,” said Michael Polk, Newell’s chief executive.

“We expect these conditions to persist through the fourth quarter of 2017 and resin inflation to now build, rather than contract as previously forecast.”

Meanwhile, internet travel stocks slid after Trivago, which runs a hotel search website, cut its full-year revenue forecast and sent tremors across the industry.

Shares of Expedia, TripAdvisor and Priceline all fell after the German-based group said an adjusted measure of its profits would decline from a year earlier and that sales growth would be lower than previously expected.

The company projected revenues to rise 40 per cent from a year earlier, down from its projection in late July for sales to climb “around 50 per cent”.

Shares of Trivago trading in the US fell 20 per cent to $11.93.

The company blamed the weakness in the US dollar, difficult comparisons to 2016 and its inability to pull planned television advertising after traffic slowed, which weighed on its margins.

Expedia slipped 3 per cent to $143.12, Priceline declined 1 per cent to $1,827.87 and TripAdvisor dropped 2 per cent to $43.72.

Separately, analysts at Credit Suisse warned this month that Priceline was suffering a deceleration in the growth of hotel bookings, citing increased competition in Asia from Traveloka.

The investment bank found that data from Google and AppAnnie, a mobile analysis firm, suggested Traveloka had gained momentum in several markets previously dominated by a Priceline subsidiary.

Overall, US equities stabilised on Wednesday after a rally in Treasuries on Tuesday undercut the stock market.

The S&P 500 was 0.2 per cent higher to 2,461.90 and the Dow Jones Industrial Average was also up 0.2 per cent to 21,806.39 in afternoon trading. The technology-heavy Nasdaq Composite was little changed at 6,376.40.