Kimberly-Clark (KMB) Stock Off on Earnings Miss

Shares of Kimberly Clark Corporation (KMB) were down -6.52 or -5.15 percent at $120.20 per share in Monday’s premarket after the company announced fourth quarter earnings that missed analyst expectations early this morning. Kimberly-Clark stock closed at $126.72 per share, up +1.77 or +1.42 percent in Friday’s regular trading session.

Founded in 1872, Irving, Texas based Kimberly-Clark began operating paper mills in Neenah, Wisconsin.
The company has since grown to be a multinational personal care corporation primarily focused on paper products. Kimberly-Clark Corporation operates in 175 countries providing personal care products to a quarter of the world’s population. Its paper brands include Kleenex, Kotex, Scott, Huggies, Pull-Ups and Depend. The company’s products hold the number one and number two sales positions in 80 of the countries where it markets its products. Kimberly-Clark is a Fortune 500 company which employs approximately 43,000 people. The company’s stock is a component of the S&P 500.

Kimberly-Clark reported adjusted earnings of $1.42 per share in the fourth quarter of its fiscal 2015 year versus $1.35 in the same period one year ago. Net sales for the quarter came to $4.5 billion, a decline of six percent versus the previous year. Analysts expected the company to earn $1.43 per share on revenue of $4.58 billion.

The company cited cost savings, organic sales growth and a lower share count in the factors contributing to the year on year increase in earnings. In the company’s press release, Chairman and Chief Executive Officer Thomas J. Falk said that, “Our fourth quarter results capped off another year of good financial performance for Kimberly-Clark. For the full year of 2015, we achieved 5 percent organic sales growth, highlighted by 10 percent growth in developing and emerging markets and a 5 percent volume increase in our North American consumer products business. We also improved adjusted operating profit margin by 120 basis points, including benefits from $365 million of FORCE cost savings.”

Kimberly-Clark recorded an after tax charge of $102 million in the fourth quarter related to the deconsolidation of its business in Venezuela from the company’s balance sheet after moving to a cost method of accounting. For the full 2015 year, Kimberly-Clark had adjusted earnings per share of $5.76 versus $5.51 last year, an improvement of five percent. The company forecast adjusted earnings per share of $5.70 to $5.80 in their latest guidance.

The company is expecting earnings per share of $5.95 to $6.15 for the full 2016 year. The forecast reflects the company’s expectation of a three to five percent organic sales growth, benign commodity costs and “significantly unfavorable currency exchange rates”. The company has weathered significant pressure in its foreign operations due to the strong dollar.

Kimberly-Clark stock has been performing well since trading under $105 per share in September of last year. This morning’s action has seen the stock recover considerably since the earnings release, and could improve further in the regular trading session depending on the strength of the overall market.

Other News About KMB

Kimberly-Clark CEO: Winning Through Organic Growth

Bloomberg interview with Tom Falk, the company’s CEO.

Huggies Brand Partners with Nurses to Establish Inaugural Huggies Nursing Advisory Council

Advisory Council will offer guidance to nurses to protect newborn’s fragile skin.
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Published on Jan 25, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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