Consumer products maker Clorox Co. (CLX) on Friday reported a fivefold increase in profit for the second quarter from last year, as the benefit of price increases and cost savings more than offset higher raw material costs. Additionally, the prior year results included a goodwill impairment charge. Both adjusted earnings per share and revenues topped analysts' expectations.
Looking ahead, Clorox reaffirmed its earnings outlook for fiscal year 2012 and raised its revenue growth forecast.
The Oakland, California-based company's second-quarter net earnings were $105 million or $0.79 per share, up from $21 million or $0.15 per share in the prior-year quarter. Earnings from continuing operations were $105 million or $0.79 per share compared to loss from continuing operations of $163 million or $1.17 per share in the year-ago period.
Excluding the Burt's Bees non-cash goodwill impairment charge of $258 million or $1.85 per share in the year-ago quarter, earnings per share from continuing operations rose to $0.79 from $0.68 last year.
On average, 17 analysts polled by Thomson Reuters expected earnings of $0.68 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 4 percent to $1.22 billion from $1.18 billion in the year-ago period, and topped analysts' consensus estimate of $1.20 billion.
The sales growth reflected increases in three of the company's four reportable segments. Volume for the quarter was flat, with gains in the Lifestyle and Household segments largely offset by lower shipments in international markets and flat volume in the Cleaning segment.
Gross margin decreased 20 basis points from last year to 41.5 percent, driven by higher commodity costs, higher manufacturing and logistics costs, and unfavorable product and country mix.
Clorox's cleaning segment net sales rose 5 percent, while household segment net sales grew 4 percent from last year. Lifestyle segment net sales advanced 6 percent, and international segment recorded flat net sales.
Looking ahead to fiscal 2012, Clorox reaffirmed its outlook for earnings from continuing operations in a range of $4.00 to $4.10 per share, including the impact of the Aplicare and HealthLink acquisitions. The company expects the acquisitions to reduce earnings per share by about $0.04, which is now included in its outlook.
Clorox currently forecasts sales growth for the year in a range of 2 to 4 percent, implying sales of between $5.33 billion and $5.44 billion, based on last year's sales of $5.23 billion. Earlier, the company forecast sales growth between 1 and 3 percent.
Analysts expect earnings per share of $4.07 for the year on revenues of $5.35 billion.
Clorox anticipates a gross margin decrease of 50 basis points to 75 basis points for the year, compared to the previous outlook of about flat. The revised outlook reflects continuing negative product and country mix.
In Friday's regular session, CLX is trading at $69.76, up $1.03 or 1.50 percent on a volume of 210,933 shares.
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