NEW YORK (AP) — Shares of Energizer Holdings Inc. jumped by nearly 8 percent Friday after the company announced plans to cut about 10 percent of its workforce as part of a restructuring plan.
THE SPARK: The St. Louis-based company said Thursday that it expects to shed about 1,500 employees. When finished, the restructuring should result in $200 million in pretax yearly savings. Most of the restructuring moves are expected to be completed by September 2014.
THE BIG PICTURE: Energizer will close plants in Missouri, Vermont and Malaysia. It also plans to streamline plants in North Carolina, Canada and some light manufacturing facilities in China. The company also said it will trim overhead spending and look for other ways to cut costs.
Also on Thursday, the maker of batteries, Schick razors and Wet Ones cleaning wipes said its fourth-quarter net income more than doubled to $117 million, or $1.84 per share. Excluding one-time items, the company earned an adjusted $1.76 per share.
Sales fell 5 percent to $1.14 billion. Energizer said the slip was partly the result of weaker demand for batteries and fewer hurricanes in the U.S. The company's quarter ended Sept. 30, and Superstorm Sandy hit the Northeastern U.S. on Oct. 29.
Analysts, on average, expected a profit of $1.55 per share and sales of $1.14 billion, according to FactSet.
The company also projected fiscal 2013 earnings per share of $6.75 to $7.00, adjusted to include estimated cost savings from the restructuring but excluding restructuring costs. Analysts expected $6.39 per share, on average.
THE ANALYSIS: Citi analyst Wendy Nicholson backed her "Buy" rating and raised her price target for the company's stock by $1 to $91.
"We like that Energizer is taking a more aggressive approach to managing its cost structure, given the arguably weaker-than-ever prospects for battery category growth over the long term," Nicholson wrote in a note to investors.
THE SHARES: Up $5.45, or 7.7 percent, to $76.27 in afternoon trading, after peaking at $78.73 earlier in the session. Over the past 52 weeks, the stock has traded between $64.36 and $80.36.