July 22 Kimberly-Clark Corp added a cautious tone to its full-year outlook on Monday, saying the stronger U.S. dollar might hurt results more than expected, even as the maker of Kleenex tissues posted a bigger-than-anticipated rise in quarterly profit.
Kimberly-Clark, which also makes Huggies diapers, said it still expects 2013 earnings per share of $5.60 to $5.75, excluding items. The forecast includes expectations for a bigger hit from the stronger U.S. dollar, which eats into sales from international markets.
Currency is now expected to reduce full-year sales 1 percent to 2 percent, versus a prior view for a hit of less than 1 percent.
The company said it should be able to cut more costs this year than it previously expected, but if currencies hold at recent rates it would be less likely to post earnings in the upper half of its forecast.
In the second quarter, Kimberly-Clark earned $526 million, or $1.36 per share, up from $498 million, or $1.26 per share, a year earlier.
Excluding restructuring costs related to changes in its European business, earnings were $1.41 per share. On that basis, analysts on average were expecting $1.39 per share, according to Thomson Reuters I/B/E/S.
Sales were roughly flat at $5.27 billion, missing analysts' estimate of $5.34 billion. Excluding foreign exchange and lost sales from the exit of certain businesses in Europe, organic sales rose 3 percent. International sales rose 9 percent.
In the North American personal care segment, sales fell 3 percent as gains for Depend adult incontinence products and Huggies baby wipes could not fully offset declines for feminine care products, Huggies Little Swimmers swim pants and private label offerings.
The company got a lift earlier this year when a tough flu season led to strong sales of Kleenex tissues, and sales of Cottonelle toilet paper were strong after rival Georgia Pacific's Quilted Northern brand had supply troubles while implementing new paper-making technology at two U.S. plants.
At that time, Kimberly-Clark said it was on track to cut $250 million to $300 million in costs this year. It raised that estimate on Monday to a range of $300 million to $350 million.
Kimberly-Clark already restructured its pulp and tissue business and is getting out of some low-profit businesses in Europe.
Shares of Kimberly-Clark have moved off of their all-time high of $105.87, reached in April when the company reported a bigger-than-expected jump in first-quarter profit and raised its full-year forecast.
In early New York Stock Exchange trading, its shares fell $1.87, or about 1.8 percent, to $97.60.