Kimberly-Clark 2Q Profit Dips, But Tops Estimates

By Markets FOXBusiness

Kimberly-Clark (KMB) narrowed its second-quarter profit by 18% but trumped Wall Street's expectations on record sales and higher prices that offset still-weak personal-care demand in North America.

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The Dallas-based maker of Pull-Ups diapers, Cottonelle toilet paper, Kleenex and other healthcare products booked net income of $408 million, or $1.03 a share, compared with $498 million, or $1.20 a share, in the same quarter last year.

Excluding one-time items, the company earned $1.18 a share, ahead of average analyst estimates polled by Thomson Reuters of $1.14 a share. Kimberly-Clark said the earnings were helped by cost saving initiatives and sales growth.

Revenue for the three months ended June 30 hit an all-time record of $5.26 billion, up 8% from $4.9 billion a year ago, beating the Streets view of $5.13 billion. Sales lifted on stronger sales volumes and improved selling prices abroad, partially offset by continued soft demand in portions of North America.

While personal-care product sales slipped 2% in the U.S. and Canada, they grew 9% and 19%, respectively, in Europe and its other international regions on demand for baby wipes and other child-care products. Emerging markets excelled during the period, particularly in China, South Korea, Brazil, Turkey and South Africa.

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Our organic sales grew in the second quarter in line with our full-year plan, as we continue to benefit from innovation and targeted growth initiatives, the companys chief executive, Thomas Falk, said in a statement. We are gaining market share in a number of businesses and are launching additional product innovations to further improve our brands.

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While the commodity cost environment has worsened over the last three months, Falk said the company is standing by its fiscal earnings view of $4.80 to $5.05 a share. Analysts are expecting earnings of $4.85 a share.