(Adds dropped word "of" in paragraph 2)
* 1st-quarter $1.48 EPS tops Wall Street view $1.34
* Raises 2013 profit forecast to $5.60 to $5.75, excluding
* Flu helped Kleenex sales in North America
* Shares hit record high of $105.83
By Jessica Wohl
April 19 Kimberly-Clark Corp posted a
bigger-than-expected jump in first-quarter earnings and raised
its forecast for the year on Friday as the maker of Kleenex
tissues got a boost from a severe flu season and a toilet paper
rival's supply problems.
Kimberly-Clark, whose shares hit an all-time high of $105.87
on Friday, sold more of its Cottonelle toilet paper in the first
quarter partly because of a supply problem at Georgia Pacific,
which makes Angel Soft and Quilted Northern toilet paper.
The privately held Georgia Pacific said on Friday that the
problem occurred at its Arkansas and Louisiana plants as they
implemented $500 million in new paper-making technology. It said
the glitch is having a short-term impact on its supply of
Quilted Northern toilet paper.
Kimberly-Clark said the amount of Kleenex tissues it sold in
North America rose by a low double-digit rate during the first
quarter, aided by a severe flu season. A year earlier, when
there was a weaker flu season, Kleenex volume was down.
PROFIT TOPS VIEW
Like its competitors, Kimberly-Clark has been looking for
ways to improve operations and cut costs. It is getting out of
some low-profit businesses in Europe and already restructured
its pulp and tissue business. Kimberly-Clark, Procter & Gamble
Co, Energizer Holdings Inc and Colgate-Palmolive
Co all cut thousands of jobs as part of their previously
Excluding items such as restructuring costs, Kimberly-Clark
earned $1.48 per share, well ahead of the analysts' average
forecast of $1.34, according to Thomson Reuters I/B/E/S.
Net income rose to $531 million, or $1.36 per share, from
$468 million, or $1.18 per share, a year earlier.
Sales rose 1.5 percent to $5.32 billion, topping the
analysts' forecast of $5.28 billion.
Healthcare, the company's smallest unit, posted a 2 percent
drop in sales and a 17 percent drop in profit. Chief Executive
Thomas Falk attributed some of the pain at that unit to a 4
percent drop in U.S. surgery admissions in the first quarter.
The company said it did not know what caused that decline.
Kimberly-Clark said it expected to post 2013 earnings per
share of $5.60 to $5.75, excluding items, versus its prior
target of $5.50 to $5.65. The analysts' average forecast is
Kimberly-Clark shares were up 4.3 percent at $105.70 on
Friday afternoon, after hitting the all-time high.
Shares of the company had risen 20 percent from the
beginning of the year heading into Friday's report,
outperforming shares of larger P&G, which were up 17.6 percent
over the same period.
For now, analysts are largely telling investors to sit on
the sidelines because Kimberly-Clark shares are already trading
at a high valuation, with nine of 18 that track the company
giving it a "hold" rating, according to Thomson Reuters data.
Four give it the equivalent of a "buy" or "strong" buy rating.
Kimberly-Clark said it cut $85 million in costs during the
quarter and is on track to cut a total of $250 million to $300
million in costs this year.
While the company has been cutting some expenses, materials
and distribution costs rose in the quarter. Input costs were up
$35 million from a year earlier, with increases of $15 million
for fiber, $10 million for other raw materials and $10 million
for distribution, it said.
(Reporting by Jessica Wohl in Chicago; editing by John Wallace,
Lisa Von Ahn and Matthew Lewis)