(By Balaseshan) Clorox Co. (NYSE: CLX), a manufacturer of consumer and professional products, reported a 17.1% increase in quarterly earnings on higher sales and volume, as well as gross margin expansion. Results exceeded Street's expectations.
Earnings for the second quarter were $123 million or $0.93 per share, up from $105 million or $0.79 per share in the same period last year.
Net sales grew 8.5% to $1.325 billion. Sales benefited from an extra shipping day in the quarter and acquisitions made in the last fiscal year. Excluding items, sales rose about 5%.
Analysts, on average, polled by Thomson Reuters had expected a profit of $0.81 per share on revenue of $1.27 billion for the second quarter.
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The company said sales also benefited from shipments to reset retail shelves with the new concentrated bleach product, as well as shipments of disinfecting products due to cold- and flu-related early third-quarter merchandising events. Volume for the second quarter increased 5%.
Sales from cleaning grew 15% to $425 million, while household sales increased 7% to $357 million. Lifestyle sales rose 8% to $237 million, while International sales increased 3% to $306 million.
Gross margin increased 100 basis points to 42.5% from 41.5% in the year-ago quarter, driven primarily by strong cost savings and the benefit of price increases.
Looking ahead into the fiscal 2013, the company narrowed its earnings guidance to range of $4.25 to $4.35 per share from previous forecast of $4.20 to $4.35 per share. CLX lifted sales growth outlook to range of 3% to 5% from previous estimate of 2% to 4%. Street analysts predict profit of $4.31 per share on revenue growth 3%.
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The company said the sales outlook reflects strong results in the first half of the fiscal year, continued category growth, product innovation across many of its brands and the benefit of previously implemented prices increases.
Uncertainty in some international markets, particularly in Venezuela and Argentina, as well as a more challenging comparison to strong sales growth of nearly 6% in the second half of fiscal 2012, continue to be factors in the company's fiscal 2013 outlook, the company noted.
CLX is trading up 1.31% at $80.20 on Monday. The stock has been trading between $66.72 and $80.86 for the past 52 weeks.