Filed Under: ,
Tickers in this Article: KMB
Kimberly-Clark (NYSE:KMB) announced its results for the most recent quarter on July 26, 2012. Kimberly-Clark manufactures and markets a range of mostly paper-based consumer products.

In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: Surprising Earnings Results

The Numbers: Kimberly-Clark posted revenues in line with analyst predictions, though the company's EPS came up short of expectations. The company reported $1.26 per share versus the $1.28 per share estimate and revenues of $5.27 billion versus the $5.28 billion estimate. EPS rose 22.3% while revenue climbed 0.2% from the same period last year. Kimberly-Clark's revenue has grown during each of the past four quarters on a year-over-year basis. Kimberly-Clark reported net income of $498 million during the second quarter. This is 22.1% higher than the year-ago quarter.

Management Quote: Chairman and Chief Executive Officer Thomas J. Falk said, "We delivered another very good quarter of results. We achieved five percent organic sales growth, led by excellent performance in K-C International. In addition, we generated a 240 basis point improvement in adjusted gross margin and delivered 10 percent growth in adjusted earnings per share. We also strengthened our brands by launching a number of innovations and increasing strategic marketing spending by $35 million. Lastly, we achieved $85 million of cost savings through our ongoing program and restructuring actions. Half way through the year, we are tracking ahead of our 2012 plan on most key financial metrics, and I'm encouraged by our execution in a continued volatile environment."

A Look Back: Falling costs likely drove gross margins up 3.7 percentage points to 33.3%. Although revenue increased 0.2% from the year-earlier quarter, costs were down 5.1%.

Net income has increased 2.3% year-over-year on average across the last five quarters. The biggest gain came in the first, when income climbed 33.7% from the year-earlier quarter.

Looking Ahead: Over the last 30 days, analysts have not been optimistic about the company's next-quarter performance. The average estimate for the third quarter is now $1.32 per share, down from $1.33. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. For the fiscal year, the average estimate has moved up from $5.10 a share to $5.16 over the last ninety days.

comments powered by Disqus

Trading Center