Kimberly-Clark Corp. on Thursday raised the bottom end of its
earnings guidance, as earnings came in higher than expected despite
the company's continuing struggles with currency volatility.
For the year, the company now expects per-share earnings between
$5.65 and $5.80, compared with the previous range of $5.60 to
$5.80. Analysts had called for earnings of $5.73.
However, Kimberly Clark warned that the negative effect of the
strong dollar is now expected to be on the high end of the
company's previous assumption, which was for a negative impact of
9% to 10%.
The maker of Huggies diapers had struggled in recent quarters as
parents have skewed to the high and low ends of the price spectrum.
The trend has played into the hands of rival Procter & Gamble
Co., whose premium Pampers and low-end Luvs are gaining share.
In the latest quarter, sales at the personal-care segment—which
includes Huggies and is the largest segment by revenue—fell 6% to
$2.3 billion, weighed by currency rates.
Sales at the consumer-tissue segment—which includes Cottonelle
and Kleenex—fell 8% to $1.5 billion, also due mostly to currency
rates. The segment benefited from lower manufacturing costs and
reduced marketing expenses.
Overall, Kimberly-Clark posted a loss of $305 million, or 83
cents a share, compared with a profit of $509 million, or $1.32 a
share, a year earlier.
Excluding special items, per-share earnings from continuing
operations were $1.41, up from $1.33 a year earlier.
Sales fell to $4.64 billion from $4.95 billion. Foreign exchange
rates accounted for a 10% drop.
Analysts polled by Thomson Reuters had forecast per-share
earnings of $1.36 a share on revenue of $4.64 billion.
Organic sales, which exclude foreign currency fluctuations and
other adjustments, increased 4%, driven by a 10% gain in developing
markets.
Shares, inactive premarket, have been down about 3% this year
through Wednesday's close.
Write to Angela Chen at angela.chen@wsj.com
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