Kimberly-Clark (NYSE: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.
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.
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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.
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.
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.