Kimberly-Clark (KMB) Sees Pressure as Q4 Profits Fail To Deliver
Kimberly-Clark Corporation (NYSE: KMB) is trading 2 percent lower mid-day Tuesday following weaker-than-expected fourth quarter profits and outlook.
Net sales for the maker of Huggies and Kleenex rose 2 percent to $5.176 billion, while organic sales grew 3 percent. The increase was driven by higher net selling prices and sales volumes as the organic growth was highlighted by a 7 percent increase in K-C International. The Street’s consensus was calling for total sales of $5.22 billion.
Operating profit was $611 million, down 13 percent from $699 million in 2010. Excluding $148 million of pulp and tissue restructuring costs, adjusted operating profit was $759 million, up 9 percent year over year.
Other (income) and expense, net was $24 million of income, driven by a gain on the sale of a small venture investment in a health care start-up company. Prior year other (income) and expense, net was $8 million of income, primarily due to foreign currency transaction gains.
Diluted net income per share for the quarter was $1.01 compared with $1.20 in the year-ago period. Fourth quarter adjusted earnings per share were $1.28 in 2011, up 7 percent compared to diluted net income per share in the prior year. These figures are below the Street's consensus of $1.30 per share.
The company finished the year with $764 million in cash and cash equivalents, down from the $876 million they had at the end of 2010.
Adjusted earnings per share in 2012 are expected to be $5.00 to $5.15, up 4 to 7 percent compared to 2011. This guidance range is below the Street's forecast of $5.24 per share for fiscal 2012. Net sales are expected to grow between 0 and 1 percent while management anticipates organic sales will increase by 3 to 4 percent.
The company also announced it expects to increase its dividend at a mid-single digit rate effective April 2012. Kimberly-Clark looks to repurchases $900 million to $1.1 billion in common shares during 2012.
Chairman and Chief Executive Officer Thomas J. Falk said, "We delivered solid improvements in organic sales, adjusted operating profit margin and adjusted earnings per share in the fourth quarter despite a continued challenging environment. Reflecting on the full year, bottom-line results were somewhat below our original goal for the year, mostly due to higher-than-expected cost inflation and soft demand in portions of the developed markets." Falk added, "Looking ahead to 2012, we expect economic conditions to remain difficult in the near term, particularly in developed markets. And while we expect a much more benign commodity cost environment, foreign currency exchange rates remain volatile and should be a headwind this year."
Net sales for the maker of Huggies and Kleenex rose 2 percent to $5.176 billion, while organic sales grew 3 percent. The increase was driven by higher net selling prices and sales volumes as the organic growth was highlighted by a 7 percent increase in K-C International. The Street’s consensus was calling for total sales of $5.22 billion.
Operating profit was $611 million, down 13 percent from $699 million in 2010. Excluding $148 million of pulp and tissue restructuring costs, adjusted operating profit was $759 million, up 9 percent year over year.
Other (income) and expense, net was $24 million of income, driven by a gain on the sale of a small venture investment in a health care start-up company. Prior year other (income) and expense, net was $8 million of income, primarily due to foreign currency transaction gains.
Diluted net income per share for the quarter was $1.01 compared with $1.20 in the year-ago period. Fourth quarter adjusted earnings per share were $1.28 in 2011, up 7 percent compared to diluted net income per share in the prior year. These figures are below the Street's consensus of $1.30 per share.
The company finished the year with $764 million in cash and cash equivalents, down from the $876 million they had at the end of 2010.
Adjusted earnings per share in 2012 are expected to be $5.00 to $5.15, up 4 to 7 percent compared to 2011. This guidance range is below the Street's forecast of $5.24 per share for fiscal 2012. Net sales are expected to grow between 0 and 1 percent while management anticipates organic sales will increase by 3 to 4 percent.
The company also announced it expects to increase its dividend at a mid-single digit rate effective April 2012. Kimberly-Clark looks to repurchases $900 million to $1.1 billion in common shares during 2012.
Chairman and Chief Executive Officer Thomas J. Falk said, "We delivered solid improvements in organic sales, adjusted operating profit margin and adjusted earnings per share in the fourth quarter despite a continued challenging environment. Reflecting on the full year, bottom-line results were somewhat below our original goal for the year, mostly due to higher-than-expected cost inflation and soft demand in portions of the developed markets." Falk added, "Looking ahead to 2012, we expect economic conditions to remain difficult in the near term, particularly in developed markets. And while we expect a much more benign commodity cost environment, foreign currency exchange rates remain volatile and should be a headwind this year."