(Bloomberg) -- Newell Brands Inc. fell as much as 7.7 percent in early trading after the impact of Hurricane Harvey on suppliers in Texas and Louisiana forced the consumer-products giant to cut its annual forecast.
The company, which owns brands ranging from Elmer's glue and Sharpie to Mr. Coffee, now expects earnings to top out at $3.05 a share this year. It had previously called for as much as $3.20.
Newell blamed Harvey's devastating effect on the resin-manufacturing industry in Texas and Louisiana, where suppliers have shut down facilities. Some vendors still aren't operating, and Newell is scrambling to find alternative sources of the material both in the U.S. and overseas. The situation is expected to drive up costs for months.
“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 U.S. resin manufacturing supply chain,” Chief Executive Officer Michael Polk said in a statement.
The shares fell as low as $44.97 in early trading on Wednesday. They had been up 9.1 percent this year, closing at $48.72 on Tuesday.
Texas produces much of the nation's chemicals and other industrial building blocks, and the disruption caused by Harvey -- the worst storm to strike the state in more than a decade -- is rippling through manufacturers across the U.S.
Newell maintained its outlook for sales in 2017, and the company expects to keep up its investment plan for the rest of the year despite the disruption.
“While meaningful, the disruption related to Hurricane Harvey is temporary, and pales in comparison to the devastating impact the storm has had on peoples' lives in Texas and Louisiana,” Polk said.
To contact the reporter on this story: Nick Turner in New York at nturner7@bloomberg.net.
To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net.
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