Kimberly-Clark Earnings: Margins Expand as Costs Fall, Net Income Rises

S&P 500 (NYSE:SPY) component Kimberly-Clark Corporation (NYSE:KMB) reported its results for the second quarter. Kimberly-Clark manufactures and markets a range of mostly paper-based consumer products.

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Kimberly-Clark Corporation Earnings Cheat Sheet

Results: Net income for Kimberly-Clark Corporation rose to $498 million ($1.26 per share) vs. $408 million ($1.03 per share) in the same quarter a year earlier. This marks a rise of 22.1% from the year-earlier quarter.

Revenue: Rose 0.2% to $5.27 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Kimberly-Clark Corporation fell short of the mean analyst estimate of $1.28 per share. Analysts were expecting revenue of $5.28 billion.

Quoting Management: 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.”

Key Stats:

Revenue has increased for four consecutive quarters. Revenue increased 4.2% to $5.24 billion in the first quarter. The figure rose 2% in the fourth quarter of the last fiscal year from the year earlier and climbed 8.1% in the third quarter of the last fiscal year from the year-ago quarter.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of $1.24 versus a mean estimate of net income of $1.17 per share.

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 Forward: Over the past sixty days, the outlook for the company’s performance next quarter has become increasingly unfavorable. The average estimate for the third quarter is $1.32 per share, a drop from $1.33. Over the past three months, the average estimate for the fiscal year has climbed from $5.10 per to share to $5.16.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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