updated 9/15/2005 9:16:35 AM ET 2005-09-15T13:16:35

Newell Rubbermaid Inc., maker of plastic products for the home and office, on Thursday announced a three-year plan to streamline manufacturing and cut overhead, including laying off 5,000 workers.

The maker of Sharpie pens and Rubbermaid trash cans said it plans to close one-third of its 80 factories worldwide.

The company expects to incur restructuring charges of $295 million to $340 million, beginning with $220 million to $250 million next year. When the plan is complete in 2008, Newell estimates annual savings of about $120 million.

The company currently has 31,000 employees worldwide.

Newell said it plans to increase its spending on marketing, research and development and “international growth opportunities,” by $40 million in 2006 and $150 million in 2008.

Looking ahead, Newell projects third-quarter income from continuing operations in a range of 33 cents to 37 cents per share, excluding an impairment charge of $35 million, or 13 cents per share. Sales are expected to slip as much as 2 percent from a year ago.

Analysts polled by Thomson Financial are looking for earnings of 36 cents per share on $1.61 billion in revenue. Last year, the company posted a third-quarter loss from continuing operations of $235 million, or 86 cents per share, and sales of $1.67 billion.

The company forecast full-year earnings from continuing operations in a range of $1.43 to $1.48, not counting the $35 million charge and $90 million in losses from discontinued operations.

Annual sales are expected to decline 1 percent to 3 percent in 2005, weakened by the company’s decision to drop low-margin product lines that generated about $200 million in revenue. Analysts predict earnings of $1.47 per share on sales of $6.37 billion.

Newell reported a loss from continuing operations of $19.1 million, or 7 cents per share, and sales of $6.75 billion last year.

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