Clorox Wednesday posted a quarterly profit that was little changed but beat analysts' estimates, and said it will acquire privately owned Burt's Bees to enter into the natural personal care business.
Clorox said it will buy Burt's Bees, which makes lip balm, soaps, and other products from natural ingredients, for $925 million net of an additional $25 million for expected tax benefits.
Excluding one-time acquisition costs, Clorox expects the deal to be neutral to earnings in fiscal 2008 and add "solidly" to earnings in fiscal 2009.
Clorox, which makes Glad plastic bags and its namesake bleach, said net profit was $111 million, or 76 cents a share, for its fiscal first quarter, ended Sept. 30, compared with $112 million, or 73 cents a share, a year earlier.
Analysts, on average, expected 62 cents a share, according to Reuters Estimates.
Earnings included $27 million in pretax charges.
The company had a lower number of shares outstanding in the first quarter, compared with a year ago.
Quarterly revenue rose 7 percent to $1.24 billion. Sales were boosted by recently acquired bleach businesses and favorable foreign exchange rates.
Clorox bought Colgate-Palmolive's Canadian and Latin American household bleach businesses in December 2006.
For fiscal 2008, the company expects per-share earnings in the range of $3.33 to $3.50, excluding the impact of the Burt's Bees acquisition, but accounting for the benefit of its previously announced share buyback plan. Previously, it had forecast earnings of $3.27 share to $3.46 a share.
Analysts expect it to earn $3.32 per share for the year, according to Reuters Estimates.
Clorox said it still anticipates sales growth from its existing brands in the 3 percent to 5 percent range for the full year. Including the acquired bleach businesses, the company sees sales growth of 4 percent to 5 percent.
Clorox, pressured by higher costs of resin and commodities like corn starch and soybean oil, said its gross margin will be lower in fiscal 2008.