Tags: Kimberly-Clark | Profit | Earnings | Forecast

Kimberly-Clark Posts Higher Profit, Raises Full-Year Forecast

Friday, 19 April 2013 09:36 AM

Kimberly-Clark posted sharply higher profits for the first quarter and raised its guidance for the year as a tough cold and flu season drove sales of Kleenex.

Revenue and adjusted net income topped Wall Street expectations and shares of the Dallas company rose nearly 3 percent in premarket trading.

For the three months ended March 31, Kimberly-Clark Corp. earned $531 million, or $1.36 per share. That compares with $468 million, or $1.18 per share, a year earlier.

Stripping out restructuring costs and other items, earnings were $1.48 per share — which the company said was its all-time record.

Analysts polled by FactSet expected earnings of $1.33 per share.

Revenue rose 2 percent to $5.32 billion, topping expectations of $5.27 billion.

Shares of Kimberly-Clark gained $2.64, or 2.6 percent, to $104 before the market open.

In the personal care segment, which sells, among other products, Huggies and Kotex pads, revenue edged up 1 percent to $2.4 billion. North American sales were flat compared with a year ago, as higher selling prices were offset by slightly lower volumes. Sales at K-C International climbed 4 percent.

The consumer tissue division reported a 4 percent increase in sales, with prices up 1 percent. Sales in North America, Europe and K-C International all rose. In North America, Kleenex volumes climbed at a low double-digit percentage rate because of a strong cold and flu season and market share gains. Paper towel volumes increased high-single digits, and bathroom tissue volumes rose mid single-digits on the strength of its Cottonelle brand.

Kimberly-Clark bumped up its expectations for the year by a dime, and now expects 2013 adjusted earnings in a range of $5.60 to $5.75 per share. That's also better than the $5.59 per share that analysts had been predicting.

However, the company anticipates higher restructuring costs through 2014 for changes it is making to its Western and Central European businesses. Kimberly-Clark previously disclosed that it had decided to stop selling diapers in Western and Central Europe, except Italy. It will also sell or exit some lower-margin businesses in certain markets, mainly in the consumer tissue segment. The company now expects after-tax restructuring costs between $300 million and $350 million. It previously anticipated costs between $250 million to $350 million.

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Kimberly-Clark Corp. posted a bigger-than-expected jump in first-quarter earnings and raised its forecast for the year on Friday as the maker of Kleenex tissues and Huggies diapers saw strong growth in its international markets and cut costs.
Friday, 19 April 2013 09:36 AM
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