Post Earnings Coverage as Kimberly-Clark Tops Market Expectations

LONDON, UK / ACCESSWIRE / July 26, 2016 / Active Wall St. announces its post-earnings coverage on Kimberly-Clark Corp. (NYSE: KMB). The company reported second quarter fiscal 2016 earnings before markets open on July 25, 2016, with earnings and revenue gaining ground compared to last year. Both topped Wall Street’s expectations; however the consumer products giant cut its organic sales outlook even as it sees foreign exchange headwinds easing over the full year. Register with us now for your free membership at: http://www.activewallst.com/register/.

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Earnings Reviewed

For the period ending on June 30, 2016, the maker of Huggies reported net income of $566 million, or $1.56 per share, as compared to a loss of $305 million, or $0.83 per share, during Q2 FY15. Adjusted earnings for Q2 FY16 were $1.53 per share, which topped the $1.47 per-share earnings consensus estimate. The company generated $4.59 billion in revenue during Q2 FY16 compared to $4.64 billion in the year ago period. Kimberly-Clark mentioned that the decline in revenue was partly due to foreign currency exchange rates; however it beat analysts’ consensus estimate of $4.57 billion in revenue.

“We delivered a good quarter of results in a challenging environment while we continue to execute our long-term Global Business Plan strategies,” Chairman and CEO Thomas J. Falk said in a release. “Half way through the year, we are broadly on track with our plans and are confirming our bottom-line earnings guidance for 2016.”

Forex Impacts

The maker of Kleenex tissues reported that sales in North America rose 4%, while it declined 7% in developing and emerging markets. Adverse foreign exchange movements reduced overall sales by 4%, but organic sales, which factor out currency fluctuations rose 3% as volumes increased 4% in Q2 FY16.The company’s consumer tissue segment, featuring its Kleenex and Scott brands, generated $1.49 billion in sales during Q2 FY16, while its personal care unit headlined by Huggies produced sales worth $2.28 billion in sales. Both divisions’ sales declined marginally on y-o-y basis due to currency factors, while volumes increase during the same time frame.

The Irving, Texas headquartered personal care product company added that its restructuring plan, which was initiated to offset costs from the spin-off of Kimberly-Clark’s health care business, is expected to be complete by the end of 2016.

Share Repurchase and Guidance

During Q2 FY16 Kimberly Clark repurchased 1.1 million shares at a cost of approximately $150 million. The company expects forex to impact full-year net sales and operating profits by 4%-5%, down from the previous forecast for “the low end of the 5 to 6 percent range”. The company anticipates FY 2016 earnings to be in the range of $5.95 and $6.15 compared to analysts’ estimates of $6.09.

Stock Performance

Post its earnings release, shares of Kimberly-Clark declined 1.52% finishing the trading session at $132.59, with 2.43 million shares being traded on July 25, 2016. The company’s shares have advanced 5.63% since the beginning of the year.

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