Newell Rubbermaid Inc. (NWL), which makes Sharpie markers (search) and other consumer goods, said on Thursday it will cut 5,000 jobs and close about one-third of its 80 manufacturing facilities.

Newell, which has been plagued by higher raw material costs to manufacture Rubbermaid storage containers, Goody hair clips and a host of other products, said the moves are part of a three-year plan to cut costs by more than $120 million annually by 2008. Dubbed "Project Acceleration," the plan is also designed to help Newell develop new products.

The company, which has over 31,000 employees, gave no details of which plants will close or how manufacturing would be realigned.

The plan marks the second major revamp under Chief Executive Joseph Galli, and is "not a complete surprise, as there has been some speculation that another restructuring was coming," said CIBC analyst Joseph Altobello, who has a "sector performer" rating on the shares.

"We believe this announcement highlights just how much is left to be done before the company truly turns the corner," he said in a research note.

Shares of Newell, which also makes Calphalon pans and kitchen wares, rose 9 cents to $22.90 on the New York Stock Exchange (search).

Newell owns or leases facilities in several U.S. states and countries, including Canada, China, Denmark, India, Mexico and Thailand.

Newell also said it is exploring alternatives for several of the product lines of its U.K. home fashions business.

Atlanta-based Newell, which plans to meet with analysts on September 22, stood by its 2005 earnings guidance.

The program should bring cumulative restructuring charges of $350 million to $400 million, beginning with about $220 million to $250 million in 2006, Newell said. The company said it would increase spending on consumer marketing, research and development and international growth.

"Even after significant progress, overhead remains high, some businesses appear difficult to fix, and commodity costs are eating away savings earmarked for reinvestment," said Deutsche Bank analyst William Schmitz, who rates Newell shares "buy."

Spending is expected to increase about $40 million in 2006 and $150 million by the end of the new plan in 2008, as Newell introduces new products.

Newell said it would continue to evaluate strategic acquisitions. Most recently, in July it announced plans to buy the DYMO labeling business from Esselte Group Holdings AB for about $730 million. That deal should close by the end of 2005.

Schmitz said Newell may also be evaluating divestitures.

Newell said it continues to expect sales to decline 1 percent to 3 percent this year. It still expects 2005 earnings of $1.43 to $1.48 per share from continuing operations and forecast third quarter earnings of 33 cents to 37 cents per share.

Analysts, on average, call for Newell to earn $1.47 per share this year, with a profit of 36 cents per share in the current third quarter, according to Reuters Estimates.

In 2006, Newell expects earnings from continuing operations of $1.50 to $1.60 per share, including the impact of the DYMO acquisition and excluding restructuring charges.

Analysts, on average, expect a 2006 profit of $1.59 per share.

On a generally accepted accounting basis, the company forecast 2006 earnings from continuing operations of 77 cents to 87 cents per share.