* Fourth-qtr EPS $1.32 ahead of analysts' forecast $1.27
* Fiscal-yr '13 EPS view now excludes one-time real estate
* Shares slide 10 cents in morning trading
By Jessica Wohl
Aug 2 Clorox Co posted a
bigger-than-expected rise in quarterly profit on Thursday, as
price increases, lower advertising spending and a decreased tax
rate offset higher costs, and it stood by its forecast for the
current fiscal year.
Clorox, known for its namesake bleach, was seeing slight
improvements in its categories and said it continued gaining
market share. While Clorox said some relief was in sight for
commodity costs, it was feeling pressure from uncertainty in
some international markets and the negative impact of the higher
Shares of Clorox, which also makes Brita water filters,
Hidden Valley Ranch salad dressing and Burt's Bees lotions, slid
10 cents to $72.06 in morning trading.
Analysts were encouraged by Clorox keeping its 2013 outlook,
which now excludes a lift from real estate gains expected to
come later than previously anticipated. However, they did not
expect the forecast to lead to big gains in the share price.
BMO Capital Markets analyst Connie Maneaty said the stock's
valuation seemed fair, with shares trading at 15.7 times her
"We believe the shares already reflect the company's healthy
market shares and improving category and margin trends," said
Oppenheimer & Co analyst Joseph Altobello.
Clorox trades at about 16.9 times earnings, while larger
household products maker Procter & Gamble Co trades at
16.5 times profit. P&G is set to report its results on Aug. 3.
PROFIT, SALES RISE
Clorox earned $174 million, or $1.32 per share, in the
fiscal fourth quarter that ended in June, up from $169 million,
or $1.26 per share, a year earlier.
Sales rose 4 percent to $1.54 billion. The volume of goods
sold rose 2 percent.
Analysts, on average, expected Clorox to earn $1.27 per
share, on sales of $1.53 billion, according to Thomson Reuters
Clorox reduced advertising spending more than expected.
Advertising spending was about 8 percent of sales, below the
9 percent to 10 percent range the company had targeted. About
half the reduction in advertising spending came from the
international business, where Clorox cut back amid challenging
economic conditions and the uncertainty around government price
controls in Venezuela and Argentina.
The quarterly profit "would have likely missed without the
advertising cuts," JP Morgan analyst John Faucher said.
Clorox raised the U.S. price of bleach 12 percent last
August to counter rising material costs that have affected
profits. Clorox, whose products include cleansers and charcoal,
is more heavily exposed to volatile commodity prices than some
larger peers. The commodities Clorox buys include resin, diesel,
chlor-alkali and sodium hypochlorite.
Clorox now has "slightly improved expectations for commodity
costs" this fiscal year, which began in July.
Clorox said it still expects to earn $4.20 to $4.35 per
share in fiscal 2013, with sales up 2 percent to 4 percent.
Analysts are looking for a profit of $4.27 per share.
The company's 2013 forecast no longer includes a one-time
gain of 5 cents to 7 cents per share from a real estate
transaction, as the timing and other details of real estate
sales are being worked out.