DALLAS – Consumer goods maker Kimberly-Clark said Monday that its earnings in July through September rose 5 percent despite tough price competition in its key diaper market. But the results, and the company’s outlook, still fell short of Wall Street’s expectations.
Kimberly-Clark, the maker of Kleenex and Huggies, said it earned $441.3 million or 89 cents per share, compared to $419.7 million or 83 cents per share a year earlier.
Analysts surveyed by Thomson First Call had forecast profit of 90 cents per share.
On Monday, Kimberly-Clark shares fell $4.03, or 6.4 percent, to close at $59.03, on the New York Stock Exchange. The stock has traded between $50.75 and $69 in the past 52 weeks.
Revenue was $3.87 billion, matching analysts’ expectations and a 6.2 percent gain over the $3.64 billion in sales a year ago.
Kimberly-Clark, which operates a tissue mill and a pulp mill in Everett, said that if it had recognized the fair value of stock options to employees, earnings would have been $431.7 million or 87 cents per share, compared to $406.6 million or 80 cents per share.
Chairman and chief executive Thomas Falk said fourth-quarter earnings would be 89 cents to 91 cents per share – below the 95 cents forecast by analysts – including a loss of 4 cents to 5 cents per share for selling its pulp and paper operations. Falk also said the company would pay higher costs for energy and raw materials.
Falk said the company would benefit from rising prices it charges consumers for tissues but that competition for sales of diapers and training pants would remain intense.
In late July, rival Procter &Gamble Co. began heavy discounts on large packages of diapers sold in discount stores. Kimberly-Clark responded by doing the same thing, starting in August. P&G also issued coupons for $5 off its training pants, prompting Kimberly-Clark to offer its own discounts.
Falk told analysts he expects the price war to continue.
For the full year, Falk said the company would hit its target range of $3.55 to $3.65 per share in earnings – below the $3.66 per share forecasts of analysts.
In the just completed quarter, Kimberly-Clark, based in suburban Dallas, said earnings rose on higher sales and currency fluctuations that boosted the value of foreign profits.
The company said revenue gains were helped by record sales of GoodNites training pants for toddlers, double-digit gains in North American sales of incontinence products such as Poise and Depend, and higher sales of health care products.
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