* Q3 adjusted profit $1.44/share vs Wall St view $1.40/share
* Raises low end of 2013 adjusted profit forecast
* Shares rise 3 percent
By Jessica Wohl
Oct 22 Kimberly-Clark Corp, maker of
Kleenex tissues, posted a bigger-than-anticipated rise in
quarterly profit on Tuesday on continued growth overseas as
well as global cost cutting.
While total sales rose a modest 0.3 percent, when stripping
out the impact of acquisitions, divestitures and foreign
exchange fluctuations, sales increased 5 percent.
That rise in so-called organic sales surpassed analysts'
expectations for an increase of just under 3 percent, with much
of the growth driven by the developing markets, said Edward
Jones analyst Jack Russo, who has a "hold" rating on the stock.
Kimberly-Clark kicked off the earnings season for U.S.
household products makers with strength in emerging markets and
manageable foreign exchange and commodities, which may "be
perceived as a positive across" the sector, said Wells Fargo
analyst Chris Ferrara.
Shares of Kimberly-Clark rose 3 percent to $101.84. Shares
of other companies still due to report their results, such as
the larger Procter & Gamble Co, showed more modest gains.
HUGGIES PRICE INCREASE COMING
Third-quarter sales and operating profit declined in
personal care, the company's biggest unit with products such as
Huggies diapers and Depend and Poise incontinence products. Much
of the sales decline in that business stemmed from
Kimberly-Clark's decision to exit much of its European business.
Kimberly-Clark plans to reduce the number of Huggies diapers
in most packages in North America by about 7 percent starting in
the first quarter of 2014 without changing the price, a move
that will lead customers to pay more per diaper. The change
comes as Kimberly-Clark tries to get its Huggies package sizes
more in line with competitors, Chief Executive Officer Thomas
Falk said on a conference call.
Sales in the North American personal-care division were
flat, as volume increased but prices fell 1 percent due largely
to promotional activity in the diaper category, where Huggies
competes against P&G's Pampers and other brands.
Kimberly-Clark earned $546 million, or $1.42 per share, in
the third quarter, up from $517 million, or $1.30, a year
Kimberly-Clark earned $1.44 per share on an adjusted basis,
which excludes restructuring costs, up from $1.34 a year earlier
and 4 cents above analysts' forecast of $1.40, according to
Thomson Reuters I/B/E/S.
Total sales increased 0.3 percent to $5.26 billion and
surpassed analysts' forecast of $5.23 billion. The volume of
goods sold rose 3 percent and prices were up 1 percent.
Kimberly-Clark raised the low end of its 2013 adjusted
earnings-per-share forecast by 5 cents. It now anticipates
earning $5.65 to $5.75 per share this year. It still expects
organic sales to rise from 3 percent to 5 percent.
While the company cut $70 million in costs, it also had to
deal with $55 million in additional costs for raw materials and
transportation versus the same period a year earlier.