Kimberly-Clark Corporation reported first quarter 2014 results and confirmed its previous guidance for full-year 2014 adjusted earnings per share.    

 

Executive Summary

First quarter 2014 net sales of $5.3 billion decreased 1 percent compared to the year-ago period. Organic sales rose 4 percent, including a 12 percent increase in K-C International. Organic sales exclude the impact of changes in foreign currency exchange rates and lower sales as a result of European strategic changes and pulp and tissue restructuring actions.

 

Diluted net income per share for the first quarter was $1.41 in 2014 and $1.36 in 2013. First quarter adjusted earnings per share were $1.48 in 2014, even with the year-ago period. 

 

Performance benefited from organic sales growth, cost savings and lower selling, general and administrative expenses. On the other hand, comparisons were negatively impacted by unfavorable foreign currency exchange rates, input cost inflation and a high level of other income in the year-ago period. The company continues to expect that adjusted earnings per share in 2014 will be between $6.00 and $6.20.

 

Chairman and Chief Executive Officer Thomas J. Falk said, "We delivered a solid first quarter with good organic sales growth and cost savings.  We also launched a number of product innovations and made further progress with targeted growth initiatives.  We continue to allocate capital in shareholder-friendly ways, as our first quarter dividends and share repurchases totaled three-quarters of a billion dollars.  

 

“And although we face continued headwinds from currency exchange rates and cost inflation, we're maintaining our full-year guidance for adjusted earnings per share.  We continue to be optimistic about the opportunities we have to drive profitable growth and generate attractive returns to shareholders."    

 

First Quarter 2014 Operating Results

Sales of $5.3 billion in the first quarter of 2014 were down 1 percent compared to the year-ago period. Organic sales rose 4 percent, with increased sales volumes of 3 percent and higher net selling prices of 1 percent.  Foreign currency exchange rates were unfavorable by 3 percent and lower sales in conjunction with European strategic changes and pulp and tissue restructuring actions reduced sales by 2 percent.

 

Operating profit was $797 million in the first quarter of 2014 versus $783 million in 2013.  Adjusted operating profit was $853 million in the first quarter of 2014 compared to $850 million in the year-ago period.  Adjusted results in 2014 exclude a $39 million charge related to a regulatory dispute in the Middle East, $10 million of restructuring costs for European strategic changes and $7 million of transaction and related costs for the company's potential spin-off of its health care business.  

 

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