Kimberly-Clark Reaches 52-Week High

Zacks

Shares of Kimberly-Clark Corporation (KMB) reached a new 52-week high of $107.84 on Oct 28, following the release of its third quarter 2013 results last week. Shares of this Zacks Rank #2 (Buy) stock eventually closed at $107.31, reflecting a year-to-date return of 27.4%.

The company’s long-term estimated EPS growth rate is 7.88%. Average volume of shares traded over the last three months came in at approximately 1.690K.

Better-Than-Expected Results

On Oct 22, Kimberly-Clark reported its third quarter 2013 results, beating the Zacks Consensus Estimate on both counts. Adjusted earnings of $1.44 per share also grew 7.5% from the year-ago result of $1.34 per share. The upswing in the earnings came from organic sales growth, cost savings, favorable tax rates and lower share count, which made up for increased input costs and currency headwinds.

Sales of this appliances and electronic retailer were almost flat year over year at $5.26 billion in the third quarter. Improvement in sales volumes, higher selling prices and favorable product mix were offset by foreign currency headwinds, lost sales in conjunction with European strategic changes and pulp and tissue restructuring actions. Excluding the aforementioned headwinds, organic sales grew 5% from the prior-year quarter.

Adjusted operating profit (excluding costs for the pulp and tissue restructuring and European strategic changes) grew 1% to $821 million, reflecting an increase in organic sales and $80 million of cost savings from the restructuring program. Adjusted operating margin also improved 10 basis points to 15.6% in the third quarter of 2013.

For 2013, Kimberly-Clark has increased the lower end of its previously provided earnings guidance. The company now expects adjusted earnings in the range of $5.65-$5.75, compared with the prior range of $5.60-$5.75, which marks year-over-year growth of 8% to 10%.

We are encouraged by the company’s leadership position in several consumer product categories including diapers, paper goods, and female personal care. Kimberly-Clark also focuses on improving its products through innovation in order to remain competitive and drive growth. It is well-positioned overseas and has been investing in key emerging markets.

The company’s restructuring program as well as its cost reduction initiatives bode well for future operating performance. The company’s divestiture of some low-margin businesses in certain markets, mostly in the consumer tissue segment also helps the company to utilize its resources in more promising markets.

Other Stocks to Consider

Other stocks in the consumer staples sector that are performing equally well and are worth considering include Energizer Holdings Inc (ENR), Pinnacle Foods Inc (PF) and The J.M. Smucker Co. Inc. (SJM), all of them with a Zacks Rank #2.

Read the Full Research Report on KMB
Read the Full Research Report on PF
Read the Full Research Report on ENR
Read the Full Research Report on SJM


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