Consumer products company Clorox Co. (CLX) on Monday reported a 17 percent increase in second-quarter profit from last year, reflecting higher sales and volume as well as margin expansion. Both earnings per share and revenue for the quarter beat analysts' expectations.
Looking ahead to fiscal 2013, the company raised the lower end of its earnings outlook range and also raised its sales growth forecast.
Sales for the second quarter benefited from an extra shipping day in the quarter and acquisitions, each contributing about 1.5 percentage points of growth.
Sales also benefited from shipments to reset retail shelves with a new concentrated bleach product in addition to shipments of disinfecting products due to cold- and flu-related early third-quarter merchandising events.
Oakland, California-based Clorox operates in four segments - cleaning, lifestyle, household, and international.
Cleaning segment sales for the second quarter rose 15 percent and household sales grew 7 percent from the prior-year period. Lifestyle segment sales gained 8 percent year-over-year, while international sales rose 3 percent.
Volume for the quarter rose 5 percent from last year. Gross margin advanced 100 basis points from the year-ago period to 42.5 percent. The increase was driven primarily by strong cost savings and the benefit of price increases, partly offset by higher manufacturing and logistics costs that include the impact of inflationary pressures.
Clorox's second-quarter net income rose to $123 million or $0.93 per share from $105 million or $0.79 per share in the year-ago period.
On average, seventeen analysts polled by Thomson Reuters expected the company to report earnings of $0.81 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 9 percent to $1.33 billion from $1.22 billion in the same period last year. Analysts had a consensus revenue estimate of $1.27 billion.
The difference between sales and volume growth for the quarter was mostly due to the benefit of price increases.
Looking ahead to fiscal 2013, Clorox now forecasts earnings in a range of $4.25 to $4.35 per share compared to the prior range of $4.20 to $4.35 per share. The company projects sales growth of 3 to 5 percent, up from the prior range for a 2 to 4 percent increase.
Analysts expect the company to earn $4.31 per share for the year on revenues of $5.63 billion.
Clorox noted that the revised outlook reflects strong results in the first half of the fiscal year, continued category growth, product innovation across many of the company's brands and the benefit of previously implemented prices increases.
In addition, the outlook reflects uncertainty in some international markets, particularly in Venezuela and Argentina. According to the company, the ongoing challenges in Venezuela include a possible currency devaluation.
In Monday's regular session, CLX is trading at $80.22, up $1.06 or 1.34 percent on a volume of 61,839 shares.
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