Analysis of Kimberley-Clark (NYSE: KMB) Earnings


Before the market opened this Tuesday, Kimberly-Clark Corp. (NYSE: KMB) announced its Q3 earnings. It reported a $1.61 EPS with revenue amounting to $5.44 billion. The American corporation on customer care went against the consensus estimate of Thomson Reuters which were $1.54 in EPS and revenue of $5.36 billion. The company stated an EPS of $1.44 for Q3 of the last year with revenue of $5.26 billion.

The company reported its net income as $582 million for the quarter which was a $17 billion increase since last year’s $565 million. In the current quarter, the company tried to improve its organizational efficiency. In order to do this, the company started a restructuring program which may cost it about $130 million to around $160 million but will have future benefits. This is inclusive of the after-tax effect.

Kimberley-Clark (NYSE:KMB) reported four of its segments this quarter which included increases of sales in personal care, consumer tissue and KC professional by 4% each making it to $2.5 billion, $1.7 billion and $0.9 billion respectively. Its Health Care segment reported a decrease in sales by 3% which amounted to $0.4 billion.

The CEO and Chairman, Thomas J. Falk stated that the company delivered good results once again this quarter as its sales grew and it reduced its costs with improvement in margins as well. The company did very well in each field this quarter doing much to keep up with consensus estimates. He also continued to state how well the company was doing as it recorded growth in double digits with earnings per share adjusted.

Falk boasted a bit about the company progressing in its initiatives, launching innovations and supporting the brand with all its spending on advertising. He continued to state that the company did really well in its cash flows and capital allocation. Kimberley-Clark’s (NYSE:KMB) shares topped 1.5% amounting to $108.04 as the market closed on Monday.

The premarket trading had no reaction to the results of the company’s earnings which is probably because investors are working on their views regarding the company through its restructuring period. The consensus price target of analysts is $110.50 with a 52-week moving average making it from $98.00 to a height of $114.45. The company has created a brand portfolio which is very strong with its cost savings program as well as its increased innovation.

This has helped the company overthrow the amount of input costs it had as well as the state in which the currency is fluctuating. The company’s sales have been impacted because of the consumer staples segment which has grown weaker over the years. These are the areas which the company has to work on the most in order to pick up pace against competitors.

If it weren’t for the sales of one segment, the company would have done pretty well than it has already. However, nonetheless the company reported a healthy Q3 earning beating estimates and proving that it is a brand which will achieve heights over the coming years.