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Kimberly-Clark Profits Top Expectations, Helped By Restructuring

Kimberly-Clark, the maker of Huggies diapers and Kleenex tissue, said fourth-quarter earnings rose, benefiting from a restructuring plan put in place in 2005.

The Irving, Texas, company also said it was optimistic about its sales and profit prospects for 2007 based on improvements it saw in the second half of 2006. But the forecasts it gave for the first quarter and the full-year call for earnings to meet or fall short of Wall Street's average expectations.

Ahead of the earnings report, some analysts were expecting that Kimberly-Clark would raise its earnings forecast for this year because prices for oil and natural gas are falling.

In the latest quarter, net income rose to $482.6 million, or $1.05 a share, from $371.1 million, or 79 cents a share, a year ago.

Before one-time items, the company earned $1.03 a share.

On that basis, Kimberly-Clark estimated fourth-quarter earnings of $1 to $1.02 a share, while analysts, on average, called for a profit of $1.02 a share, according to Thomson Financial.

Sales rose 7.4% to $4.31 billion, aided by some price increases and stronger foreign currencies.

The company, under pressure from higher costs for materials such as pulp, is about 18 months into a restructuring that includes cutting 6,000 jobs as it works to improve its diaper and health-care businesses and expand in emerging markets.

Kimberly-Clark estimated first-quarter adjusted earnings of 99 cents to $1.01 a share. Analysts, on average, expect the company to earn $1.01 a share.

For the full year, the company expects adjusted earnings of $4.10 to $4.20, while analysts call for a profit of $4.20 a share.

Kimberly-Clark also said that it plans to repurchase about $600 million to $800 million of its shares. It also plans to set a high single-digit dividend increase in April 2007, subject to board approval.

The company held a conference call and webcast at 10 am New York time today.

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