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Kimberly Clark (KMB) 4Q Earnings Drop 33.4 Pct, Yet Beat Estimates

 January 25, 2013 08:14 AM

(By Balaseshan) Kimberly Clark Corp. (NYSE: KMB), which manufactures health care products, reported a 33.4% drop in quarterly earnings due to higher costs and expenses. However, results exceeded Street's expectations, sending its shares up 1.64% in premarket.

Earnings for the fourth quarter were $267 million or $0.68 per share, down from $401 million or $1.01 per share last year.

Adjusted earnings per share (EPS) rose to $1.37 from $1.28, driven by organic sales growth and cost savings, partially offset by increased marketing, research and general spending and a higher level of other expense.

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Net sales rose 2.5% to $5.31 billion. Organic sales increased 5%, highlighted by a 9% increase in K-C International. Changes in foreign currency rates and lost sales from exiting non-strategic products in conjunction with pulp and tissue restructuring actions each reduced sales by 1%.

Analysts, on average, polled by Thomson Reuters had expected a profit of $1.35 per share on revenue of $5.19 billion for the fourth quarter.

Personal care sales increased 8% as volumes rose 6% and net selling prices improved by 3%, while consumer tissue sales declined 2% as pulp and tissue restructuring actions lowered volumes by 3% and changes in currency rates and product mix each decreased sales by 1%.

K-C Professional (KCP) sales increased 1% as Organic sales volumes were up 2% and net selling prices improved 1%, while health care sales decreased 2% as changes in sales volumes, net selling prices and currency rates each reduced sales about 1%.

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Looking ahead into the fiscal 2013, the company expects adjusted EPS of $5.50 to $5.65 and net sales growth of 0% to 3%, while Street analysts predict EPS of $5.58 on revenue growth of 1.20%.

The company expects to increase its dividend at a high-single digit rate effective April 2013. Share repurchases are anticipated to total $1.0 billion to $1.2 billion in 2013.

KMB closed Thursday's regular session down 0.48% at $86.58. The stock has been trading between $70.50 and $88.25 for the past 52 weeks.

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