Kimberly-Clark organic Q2 sales rise 3%

Executive Summary

Second quarter 2013 net sales of $5.3 billion were even with the year-ago period.  Organic sales rose 3 percent, including a 9 percent increase in K-C International.  Organic sales exclude the impact of changes in foreign currency exchange rates and lost sales as a result of European strategic changes and pulp and tissue restructuring actions.

Diluted net income per share for the second quarter of 2013 was $1.36 versus $1.26 in 2012.   

Second quarter adjusted earnings per share were $1.41 in 2013 compared to $1.30 in the prior year.  The improvement was driven by organic sales growth, cost savings, higher equity income and a lower share count, partially offset by input cost inflation, unfavorable foreign currency rates and a higher effective tax rate. 

Second quarter 2013 adjusted earnings per share exclude restructuring costs for European strategic changes.  Adjusted earnings per share in the second quarter of 2012 exclude costs for pulp and tissue restructuring actions.

Adjusted earnings per share in 2013 are anticipated to be $5.60 to $5.75.  This range is consistent with the company's previous guidance and includes expectations for higher cost savings but a more negative impact from currency exchange rates compared to previous assumptions.  Estimated full-year 2013 adjusted earnings per share exclude restructuring costs for European strategic changes and a balance sheet remeasurement charge due to the February 2013 devaluation of the Venezuelan bolivar.

Chairman and Chief Executive Officer Thomas J. Falk said, "We delivered another solid quarter of results while we continued to execute our Global Business Plan strategies.  We achieved 3 percent organic sales growth, as excellent results in K-C International more than offset mixed volume performance in the developed markets. 

"We generated $80 million of cost savings, improved adjusted operating profit margin by 80 basis points and delivered an 8 percent increase in adjusted earnings per share.  We also launched a number of product innovations and continued to allocate capital in shareholder-friendly ways.  At the half way point of the year, I am encouraged by our progress overall." 

Falk added, "In terms of the full year, we continue to target organic sales growth of 3 to 5 percent, led by K-C International.  We are also reconfirming our previous guidance for adjusted earnings per share, as we expect to overcome additional currency headwinds primarily with higher FORCE cost savings. 

"If recent spot currency rates generally hold going forward, it is less likely that adjusted earnings per share will be in the upper half of our guidance range.  Although the macro environment has become more volatile recently, we continue to be optimistic about our prospects to drive profitable growth and to generate attractive returns to shareholders."

Kimberly-Clark