×

UPDATE 1-Newell Brands cuts profit forecast as Harvey hits resin supplies

(Adds details)

Sept 6 (Reuters) - Sharpie maker Newell Brands Inc cut its adjusted profit forecast for 2017 as Hurricane Harvey hit its resin suppliers and pushed up the company's costs to find other suppliers.

Newell is among the first U.S. companies to cut its forecast due to Hurricane Harvey, which made its landfall on Aug. 25 and became the most powerful hurricane to hit Texas in more than half a century.

Newell said nearly all of its resin suppliers with facilities in Texas and Louisiana had declared force majeure and shut many plants for more than a week, with some still not opened.

The company said it now expects a full-year adjusted profit of $2.95 to $3.05 per share, down from its previous forecast of $3.00 to $3.20.

Newell, which uses resins to make products such as cabinets and garbage containers, left its sales forecast unchanged.

Newell said it now expects the resin shortage to persist through the fourth quarter, resulting in prices rising, rather than falling as it had forecast, through the rest of 2017 and into 2018.

Resin and metals account for 8-15 percent of Newell's raw material costs, according to the company's regulatory filing.

Newell said its search for alternative suppliers met with "some early success, albeit at a significantly higher delivered cost than in its plans".

The company's shares were down nearly 8 percent in light premarket trading on Wednesday. They had risen about 9 percent this year through Tuesday's close. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Savio D'Souza)