UPDATE 4-Flu fears boost Clorox profit; tops Street view

Mon Nov 2, 2009 3:25pm EST

* Q1 EPS $1.11; analysts' view $0.95

* Sales fall 0.87 pct to $1.37 bln, just above Street view

* Raises FY view to $4.05-$4.20/share from $4.00-$4.15

* To launch natural Burt's Bees toothpaste in January

* Shares up 0.5 percent in afternoon trade (Adds comments from company, Greenpeace; updates stock)

By Jessica Wohl

CHICAGO, Nov 2 (Reuters) - Strong sales of disinfecting products spurred by the H1N1 flu pandemic helped Clorox Co (CLX.N) post a bigger-than-expected quarterly profit and raise its full-year forecast, sending its shares slightly higher.

The maker of household goods such as Clorox bleach and wipes as well as Glad trash bags said lower commodity prices, cost cuts and price increases also boosted results.

"H1N1, that's the name of the game," said UBS analyst Nik Modi. "That's what really helped them with the upside."

H1N1, or swine flu, drove 2 percentage points of sales growth in the quarter, Larry Peiros, chief operating officer of Clorox North America, said during a conference call.

Overall sales fell less than 1 percent to $1.37 billion, coming in just ahead of analysts' expectations.

Clorox is the latest in a string of companies to benefit from flu-related sales. Ecolab Inc (ECL.N) saw strong demand for sanitizer in its latest quarter. [ID:nN27234482]. 3M Co and Kimberly-Clark Corp reported increased sales of face masks. [ID:nN22177970] Drugstore Walgreen Co (WAG.N) saw sales rise after giving more flu shots at its pharmacies. [ID:nN02313508]

Clorox, like many other companies, ramped up production to meet increased demand. While Clorox is seeing continued high demand for disinfectants as the flu season progresses, it expects some drop-off in demand in the future.

Clorox earned $157 million, or $1.11 per share, in the fiscal first quarter, up from $128 million, or 90 cents per share, a year earlier.

Analysts had expected earnings of 95 cents per share in the quarter, which ended on Sept. 30, according to Thomson Reuters I/B/E/S.

Shares of Clorox were up 0.5 percent to $59.50 in afternoon trade after jumping as much as 2.4 percent.

BLEACH PRODUCTION CHANGING, TOOTHPASTE ON THE WAY

Volume rose 1 percent after falling 2 percent in the fourth quarter. Volume in the cleaning category rose 4 percent, with record shipments of Clorox disinfecting wipes and Clorox toilet bowl cleaners.

International volume rose 3 percent, driven by bleach and other disinfecting products in Latin America.

Clorox said it plans to start using high-strength bleach, rather than chlorine, to make its namesake bleach at its seven U.S. plants, a move that should be break-even in cost.

Greenpeace applauded the change, which it said would eventually eliminate risks from chlorine gas to 13.6 million Americans who live downwind of Clorox facilities as well as the risk posed by transporting chlorine gas.

Clorox also said it would continue its push in natural products by introducing six Burt's Bees toothpastes in January. The toothpastes will compete directly with brands such as Colgate-Palmolive Co's (CL.N) Tom's of Maine.

It is also expanding international distribution of Burt's Bees personal products from 14 countries to more than 20.

Clorox said it does not expect to gain distribution for its Green Works eco-friendly, premium-priced laundry products in Wal-Mart Stores Inc (WMT.N) soon, as pricing is key in the detergent aisle of stores these days. The detergent and stain remover are off to slower starts than Clorox anticipated.

Clorox said it now expects to earn $4.05 to $4.20 per share in the current fiscal year, which began in July. That forecast includes a 2-cent hit from adopting a new accounting standard.

Clorox previously forecast a profit of $4.00 to $4.15 a share, and analysts have been expecting $4.18.

Clorox said it still expects sales to rise 1 to 2 percent this year. It expects volume growth of about 3 to 4 percent.

Modi, who has a "buy" rating on Clorox shares, said the company is still being cautious with its earnings outlook. (Reporting by Jessica Wohl; Editing by Dave Zimmerman, John Wallace, Gary Hill)

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