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Here's How Kimberly-Clark (KMB) Looks Ahead of Q3 Earnings

Zacks Equity Research
·3 min read

Kimberly-Clark Corporation KMB is likely to post a decline in the top and the bottom line when it reports third-quarter 2020 results on Oct 22. The Zacks Consensus Estimate for third-quarter earnings has moved up by a couple of cents to $1.76 in the past 7 days. However, this suggests a decline of 4.4% from the figure reported in the year-ago quarter. We note that this consumer products company has a trailing four-quarter earnings surprise of 7.4%, on average. In the last reported quarter, the company delivered an earnings surprise of 20.9%.

The consensus estimate for quarterly revenues is pegged at $4.61 billion, which suggests a drop of 0.6% from the prior-year quarter’s tally.

KimberlyClark Corporation Price and EPS Surprise

KimberlyClark Corporation Price and EPS Surprise
KimberlyClark Corporation Price and EPS Surprise

KimberlyClark Corporation price-eps-surprise | KimberlyClark Corporation Quote

Key Factors to Note

Kimberly-Clark’s K-C Professional segment sales were hurt by reduction in demand for washroom and safety products in the last reported quarter. In second-quarter earnings call, management stated that it expects sluggishness in the segment to persist all through 2020. We believe that this poses concerns for the company’s third-quarter 2020 results. Apart from these, rise in marketing, research and general expenses along with unfavorable foreign currency translations are concerns.

Nevertheless, Kimberly-Clark’s Consumer Tissue segment is witnessing a spike in demand amid the coronavirus outbreak. Also, the company’s efforts to lower costs through its 2018 Global Restructuring Program as well as the Focus on Reducing Costs Everywhere or FORCE Program is yielding positive results. Apart from this, Kimberly-Clark’s focus on three key strategic growth pillars and K-C Strategy 2022 bodes well.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Kimberly-Clark this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Kimberly-Clark has a Zacks Rank #3 and an Earnings ESP of +0.40%.

Stocks With Favorable Combination

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.

Procter & Gamble PG currently has an Earnings ESP of +1.58% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Church & Dwight CHD has an Earnings ESP of +6.71% and a Zacks Rank #3.

Medifast MED currently has an Earnings ESP of +1.54% and a Zacks Rank of 3.

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KimberlyClark Corporation (KMB) : Free Stock Analysis Report
 
Church Dwight Co., Inc. (CHD) : Free Stock Analysis Report
 
Procter Gamble Company The (PG) : Free Stock Analysis Report
 
MEDIFAST INC (MED) : Free Stock Analysis Report
 
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Zacks Investment Research