Kimberly-Clark Announces Second Quarter 2017 Results

Kimberly-Clark Corporation (NYSE: KMB) today reported second quarter 2017 results and updated some of its key planning and guidance assumptions for full-year 2017.

Executive Summary
◦Second quarter 2017 net sales of $4.6 billion decreased 1 percent compared to the year-ago period, as organic sales were down 1 percent. Organic sales fell 2 percent in North American consumer products, reflecting category softness, less promotion shipments and competitive activity. Outside North America, organic sales declined 3 percent in developed markets and rose 2 percent in developing and emerging markets.
◦Diluted net income per share for the second quarter was $1.49 in 2017 and $1.56 in 2016. Results were impacted by lower sales and input cost inflation, while the comparison benefited from cost savings. Second quarter adjusted earnings per share were $1.53 in 2016, which excludes items described later in this release.
◦Full-year 2017 net sales and organic sales are expected to be similar, or up slightly, year-on-year. The company’s previous estimate was for sales and organic sales to be up 1 to 2 percent.
◦The company anticipates full-year 2017 earnings per share will be at the low end of its target range of $6.20 to $6.35.

Chairman and Chief Executive Officer Thomas J. Falk said, “Our second quarter results reflect a challenging environment. Nonetheless, we continue to manage our company with financial discipline, as we achieved $120 million of cost savings, improved working capital and returned more than $600 million to shareholders through dividends and share repurchases. We are focused on competing effectively in the near-term while we continue to execute our Global Business Plan strategies for long-term success.”

Second Quarter 2017 Operating Results
Sales of $4.6 billion in the second quarter of 2017 were down 1 percent compared to the year-ago period. Changes in foreign currency exchange rates had no overall effect on sales. Organic sales were down 1 percent due to lower net selling prices.

Second quarter operating profit was $799 million in 2017 and $838 million in 2016. The year-over-year comparison was impacted by lower sales and $75 million of higher input costs, driven by increases in pulp and other raw materials. Results in 2017 included $120 million of cost savings from the company’s FORCE (Focused On Reducing Costs Everywhere) program.

The second quarter effective tax rate was 28.2 percent in 2017 and 28.6 percent in 2016. The rate in both periods benefited from the resolution of certain tax matters. The rate in 2017 also benefited from the adoption of Accounting Standards Update No. 2016-09, which relates to accounting for employee share-based compensation. The company expects that the full-year 2017 effective tax rate will be similar to, or slightly lower than, 2016’s adjusted effective tax rate of 30.7 percent.

Kimberly-Clark’s share of net income of equity companies in the second quarter was $26 million in 2017 and $35 million in 2016. At Kimberly-Clark de Mexico, results were impacted by a weaker Mexican peso and higher input costs, partially offset by benefits from organic sales growth and cost savings.
more detail at:  http://investor.kimberly-clark.com/releasedetail.cfm?ReleaseID=1034287

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