UPDATE 4-Clorox profit tops Street, stands by FY profit view
* Q2 EPS $0.62 vs Wall Street view $0.57
* Cutting 170 jobs as part of restructuring
* Maintains FY EPS forecast, cuts sales forecast again
* Shares up 1.7 percent (Adds executive quotes, details on workforce, margins, capex)
By Aarthi Sivaraman and Alexandria Sage
NEW YORK/SAN FRANCISCO, Feb 4 (Reuters) - Clorox Co (CLX.N) posted a lower quarterly profit but topped Wall Street's expectations as lower costs offset an overall volume decline, and its shares rose 1.7 percent.
Clorox also maintained its profit forecast for the year but lowered its estimate for sales growth. In recent months, the recession has led consumers to buy cheaper products and use up what they have at home.
Clorox said on Wednesday it would cut 170 jobs over the next 18 months, representing some 2 percent of its total workforce of 8,300. It has slowed hiring and expects to reduce further positions through attrition.
The maker of Clorox bleach, Glad trash bags and Brita water filters also said it would take more restructuring charges this year than initially planned.
Clorox profit fell to $86 million, or 62 cents per share, in its fiscal second quarter ended Dec. 31, from $92 million, or 65 cents per share, a year earlier. Analysts, on average, had expected Clorox to earn 57 cents per share, according to Reuters Estimates.
Sales rose 3 percent to $1.22 billion, aided by price increases and the Burt's Bees line of lip balms and lotions, which Clorox bought in November 2007. But foreign exchange rates took a bite out of sales and volume slipped 1 percent.
INVENTORY CUTS DRAG ON SALES
Chairman and Chief Executive Don Knauss called the macroeconomic environment "very dynamic and difficult," but said he was cautiously optimistic about the company's business.
Inventory cuts by the company's retail customers in every category hurt overall sales in the quarter, he said.
"The inventory actions taken in November were particularly steep," said Knauss, speaking to analysts.
Still, the majority of price increases the company has rolled out over the past three years would likely stick despite the bad economy, he said. The company has only rolled back one price hike, that of Glad Trash Bags, in December.
"Volumes were a bit light due to retailer inventory reductions and the weak consumer, issues we believe could persist," wrote Oppenheimer analyst Joseph Altobello in a note.
Clorox said it had not seen any meaningful slowdown in sales of its recently launched green cleaning products and posted volume and market share gains by its Hidden Valley salad dressing.
Clorox said it still expects to earn $3.60 to $3.75 per share in the current fiscal year.
It now expects sales to rise 3 percent to 5 percent, as retailers and consumers pare their spending in the recession. In October, Clorox forecast fiscal 2009 sales growth of 4 percent to 6 percent, down from a prior forecast of 6 percent to 8 percent.
Clorox now expects to take restructuring charges of $35 million to $37 million this year, up from a prior forecast of $20 million to $25 million.
Calling the second quarter "a wild ride," Chief Financial Officer Dan Heinrich said he expects margins to expand in the second half of the fiscal year on lower commodity costs and expenses, and price increases. That will result in a boost of 50 to 100 basis points for the full fiscal year, he said.
The company said it was trimming fiscal 2009 capital spending to $185 million from a previous estimate of $200 million to help fund a cash contribution of up to $25 million to its pension plan.
Clorox shares rose as high as $54.76, before trading up 88 cents at $52.70 on the New York Stock Exchange late Wednesday afternoon. (Additional reporting by Jessica Wohl in Chicago; editing by Dave Zimmerman, Richard Chang)
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