DALLAS — Diaper and tissue giant Kimberly-Clark Corp. said fourth-quarter profits slipped 5.5 percent as higher costs for paper pulp and energy swamped a 10.5 percent increase in revenue.
The company, which makes Kleenex tissue and Huggies diapers and operates a pulp and paper products mill in Everett, said cost pressures will continue to be a challenge.
It forecast first-quarter and 2008 profits below Wall Street expectations. Shares fell 1 cent to $64.43 Thursday.
Kimberly-Clark said it earned $456 million, or $1.07 per share, in the fourth quarter, down from $482.6 million, or $1.05 per share a year earlier. Excluding charges, the company said it would have earned $1.11 per share.
Revenue rose to $4.76 billion. Sales grew briskly in developing countries and among the company’s U.S. personal care division, which includes diapers and baby wipes. The consumer-tissue business sagged, however, with profits falling 22 percent from a year earlier.
Much of the slump in tissues was because of higher costs. The firm said the increases were forcing it to raise prices 4 percent to 7 percent for diapers, training pants, bathroom tissues and paper towels beginning Feb. 3.
As it has been doing, Kimberly-Clark will boost per-share profit by buying back its own stock. It spent $2.8 billion to reduce its share count by 8 percent last year, boosting shares 2 percent. Through Thursday, shares were down 7 percent this year, following the trend of the broader market.
Raw materials and energy costs rose faster than the company expected in 2007, and executives said they would rise at least $400 million this year.
Chairman and Chief Executive Thomas Falk said the company is 90 percent finished with a project to cut annual costs at least $350 million by 2009 through closing, selling or overhauling 24 facilities and shedding jobs. The company saved $105 million last year by streamlining operations in North America and Europe, he said.
For all of 2007, Kimberly-Clark earned $1.82 billion, or $4.09 per share, on sales of $18.27. That compared to 2006 earnings of $1.50 billion, or $3.25 per share, on $16.75 billion in sales.
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