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Q3 adjusted EPS at K-C touches all time high

27 Oct '14

3 min read

Hygienic products marketer and NYSE-listed Kimberly-Clark Corporation (K-C) said its third quarter ending September 30, 2014 adjusted earnings per share reached an all-time record.

K-C’s adjusted earnings per share touched $1.61 in the third quarter of 2014 compared to $1.44 in the third quarter of 2013.

K-C said earnings per share performance benefited from organic sales growth, cost savings and a lower share count.

In the reporting quarter, sales rose 3 percent from the prior year quarter to $5.4 billion, while organic sales moved up by 4 percent, including a 10 percent increase in K-C International.

Volumes and net selling prices, each of which grew by 2 percent, help sales ascend, while European strategic changes and foreign currency exchange rates, marginally impacted revenues.

Operating profit for the third quarter went up to $907 million, up from $807 million in same quarter of 2013.

Adjusted operating profit totalled $948 million in the third quarter of 2014, up 15 percent compared to $821 million in the year-ago period.

K-C said adjusted results in 2014 exclude $40 million of transaction and related costs for the spin-off of the health care business and $1 million of restructuring costs for European strategic changes.

“Operating profit benefitted from organic sales growth and $100 million in cost savings from its costs saving program – FORCE”, the hygienic products marketer explained.

Total marketing, research and general expenses were down slightly versus prior-year levels, despite a $10 million increase in advertising spending.

Input costs increased $55 million over the quarter of 2013, with raw materials other than fibers, accounting for $35 million of increased costs, $10 million of higher fiber costs and $10 million higher distribution costs.

Foreign currency translation effects had minimal overall impact on operating profit, while currency transaction effects impacted it negatively, primarily in Eastern Europe and Latin America.

The third quarter effective tax rate rose to 34.5 percent in 2014 compared to 30.3 percent in 2013. K-C now expects full-year 2014 adjusted effective tax rate to be between 31.0 and 32.5 percent.

K-C now expects full-year adjusted earnings per share in 2014 of between $5.93 and $6.03, assuming that the health care business spin-off happens by end-October 2014.

CEO Thomas Falk said, "We delivered another very good quarter, with solid organic sales growth, significant cost savings and margin improvement, and double-digit growth in adjusted earnings per share.” (AR)

Fibre2fashion News Desk - India

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