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Kimberly-Clark Q3 Profit Tops Estimates; Organic Sales Up 1%

kimberlyclark oct22 lt

Kimberly-Clark Corp. (KMB) reported third-quarter adjusted earnings per share of $1.71, an increase of 7 percent compared to net income per share of $1.60, prior year. On average, 16 analysts polled by Thomson Reuters expected the company to report profit per share of $1.64 for the quarter. Analysts' estimates typically exclude special items. Adjusted operating profit was $798 million compared to $868 million, previous year.

Net Income attributable to Kimberly-Clark declined 20% year-over-year to $451 million. Net income per share was $1.29 compared to $1.60. Third-quarter operating profit was $669 million, including charges related to the 2018 Global Restructuring Program. Third quarter 2018 restructuring charges were $149 million pre-tax ($119 million after tax).

Third-quarter net-sales were $4.58 billion, down 2 percent compared to the year-ago period. Changes in foreign currency exchange rates reduced sales by 3 percent while organic sales increased 1 percent. Analysts expected revenue of $4.53 billion for the quarter.

The company continues to target full-year 2018 organic sales growth of approximately 1 percent and adjusted earnings per share of $6.60 to $6.80, a year-on-year increase of 6 to 9 percent.

CEO Thomas Falk said, "We delivered 1 percent organic sales growth in the third quarter, reflecting our initiatives to improve selling prices and product mix. While our profitability was impacted by significant commodity and currency headwinds, we continue to launch innovations, pursue our growth priorities and invest in our brands for long-term success. We also continue to manage our company with financial discipline, as we generated total cost savings of $145 million, reduced discretionary spending and returned approximately $520 million to shareholders through dividends and share repurchases."

Kimberly-Clark said it expects the company's Global Restructuring Program will generate annual pre-tax cost savings of $500 to $550 million by the end of 2021, driven by workforce reductions along with manufacturing supply chain efficiencies. As part of the program, Kimberly-Clark expects to exit or divest some low-margin businesses that generate approximately 1 percent of company net sales. The sales are concentrated in the consumer tissue business segment. To implement the program, the company expects to incur restructuring charges of $1.70 to $1.90 billion pre-tax ($1.35 to $1.50 billion after tax) by the end of 2020.

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