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Kimberly-Clark Profit Rises on Weak Dollar
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Kimberly-Clark Monday posted a 24 percent increase in quarterly profit as the weaker dollar and strong sales volume in Huggies baby wipes and Kleenex tissue helped offset rising costs for pulp.
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Kimberly-Clark headquarters (Pic AP) |
Higher prices also helped the company's sales beat analysts' estimates.
Like many consumer-products companies, Kimberly-Clark has been trying to keep up with rising costs by increasing prices.
The company raised prices on bathroom tissue, paper towels and some diapers last year. Earlier this year, it announced that prices of other products would also be going up, but not until early 2008.
The company has also been cutting costs and is looking for growth in developing and emerging markets.
Third-quarter profit was $453.1 million, or $1.04 a share, compared with $364.2 million, or 79 cents a share, a year earlier.
Excluding restructuring charges and a gain for a legal settlement, earnings were $1.07 a share, compared with the $1.06 average analyst estimate compiled by Reuters Estimates.
Sales rose 9.7 percent to $4.62 billion, topping the average analyst estimate of $4.51 billion compiled by Reuters Estimates. The weaker dollar, which raises the value of sales overseas for U.S. companies, added about 3 percent to sales, the company said.
For the fourth quarter, the company forecast earnings of $1.09 to $1.11 a share, before one-time items. Analysts on average forecast $1.10 a share, according to Reuters Estimates.
"Although investors may interpret this negatively, keep in mind that Kimberly has beaten its guidance for EPS several quarters in a row and likes to maintain a manageable bar, particularly given some of the headwinds in the macro environment," said April Scee, an analyst at Banc of America Securities, who has a "buy" rating on the stock.
Kimberly-Clark shares [KMB
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] rose more than 3 percent on the New York Stock Exchange Monday. The stock is down 1.2 percent this year, compared with a 10.2 percent increase for rival Procter & Gamble [PG
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Data is a real-time snapshot *Data is delayed at least 15 minutes
