WASHINGTON (dpa-AFX) - Healthcare products maker Kimberly-Clark Corp. (KMB) reported Monday a profit for the first quarter that edged up one percent from last year, primarily reflecting lower expenses and organic sales growth. Adjusted earnings per share topped analysts' expectations, while quarterly sales missed their estimates The company also reaffirmed its adjusted earnings guidance for full-year 2014.
'We delivered a solid first quarter with good organic sales growth and cost savings. We also launched a number of product innovations and made further progress with targeted growth initiatives. We continue to allocate capital in shareholder-friendly ways, as our first quarter dividends and share repurchases totaled three-quarters of a billion dollars,' Chairman and CEO Thomas Falk said.
The Dallas, Texas-based company reported net income of $538 million or $1.41 per share for the first quarter, higher than $531 million or $1.36 per share in the prior-year quarter.
Excluding items, adjusted net income for the quarter was $566 million or $1.48 per share, compared to $578 million or $1.48 per share in the year-ago quarter.
On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $1.47 per share for the quarter. Analysts' estimates typically exclude special items.
The company attributed the improvement in adjusted profit to organic sales growth, cost savings, and lower marketing, research and general expenses, partially offset by input cost inflation, unfavorable foreign currency rates and lower other income.
Net income of equity companies totaled $43 million, down from $53 million last year.
Net sales for the quarter edged down 0.8 percent to $5.28 billion from $5.32 billion in the same quarter last year, and missed fourteen Wall Street analysts' consensus estimate of $5.32 billion.
However, organic sales rose 4 percent, driven by a 3 percent rise in sales volumes and higher net selling prices of 1 percent. Changes in foreign currency exchange rates decreased sales by about 3 percent and lost sales from European strategic changes and pulp and tissue restructuring actions reduced sales by about 2 percent.
Personal care segment sales edged down 0.6 percent to $2.38 billion, and sales at consumer tissue segment decreased 1.7 percent to $1.69 billion from last year. K-C Professional segment sales edged up 0.9 percent to $800 million, while sales at health care segment remained flat with last year at $397 million.
The company noted that marketing, research and general expenses for the quarter declined 5.5 percent to $971 million from $1.03 billion in the year-ago quarter.
'And although we face continued headwinds from currency exchange rates and cost inflation, we're maintaining our full-year guidance for adjusted earnings per share. We continue to be optimistic about the opportunities we have to drive profitable growth and generate attractive returns to shareholders,' Falk added.
Looking ahead to full year 2014, the company continues to expect adjusted earnings in a range of $6.00 to $6.20 per share. Street is currently looking for full year 2014 earnings of $6.11 per share.
The company noted that it expects to seek approval from the Board of Directors for the potential spin-off of its health care business that was announced in November 2013. It also anticipates completing the spin-off at the end of the third quarter or potentially in the fourth quarter of 2014.
KMB closed Thursday's regular trading session at $112.54, up $0.45 on a volume of 2.89 million shares. In the past 52-week period, the stock has been trading in a range of $91.44 to $113.09.
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