Kimberly-Clark’s Q1 Profit Climbs 34 Percent
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DALLAS (AP) - Personal care company Kimberly-Clark Corp. said Friday that its first-quarter profit rose 34 percent, better than analysts expected, as higher selling prices and strong international sales helped offset rising costs.
Like many businesses, the maker of Kleenex tissues, Huggies diapers and other household goods, is struggling with higher costs for raw materials like oil, wood, pulp and other things it needs to make and transport its products.
It has raised prices on some products to help offset some of the expense, but must tread cautiously with price hikes to avoid turning off budget-minded shoppers. It raised prices for personal care products in North America about 2 percent during the quarter.
Its latest results beat Wall Street expectations, and its shares rose $1.48, or 2 percent, to $76.75 in premarket trading. That would surpass its 52-week high of $75.77 if it carries over into regular trading.
The Dallas company reported its net income rose to $468 million, or $1.18 per share, during the three months ended March 31, up from $350 million, or 86 cents per share, a year ago.
Excluding costs for restructuring its pulp and tissue operations, it earned $1.24 per share. Analysts expected adjusted earnings of $1.17 per share, according to FactSet.
Revenue rose 4 percent to $5.24 billion from $5.03 billion a year ago. Analysts expected revenue of $5.05 billion.
Personal care revenue rose 8 percent to $2.4 billion. North American personal care revenue rose 1 percent. However, volume for infant care and child care products fell in the mid- to high-single digits, due to category-wide declines in demand as consumers trade-down to cheaper options for child care items.
Kimberly-Clark, like most consumer products companies, is increasingly relying on international sales for growth. Personal care revenue rose 4 percent in Europe and 17 percent in other international markets. Volume was up in the double digits in each major international region, including Asia, Latin America, and the Middle East/Eastern Europe/Africa.
Consumer tissue revenue fell 1 percent to $1.7 billion. Kleenex sales were flat due partly to a weak cold and flu season this year.
Kimberly-Clark reiterated guidance of adjusted 2012 net income of $5 to $5.15 per share. Analysts expect $5.12 per share.
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