Kimberly-Clark Corporation KMBreported first-quarter 2018 results, with the top and the bottom lines improving year over year. While earnings were in line with the Zacks Consensus Estimate, sales exceeded the same for the third consecutive period. In fact, strong performance across key market locations prompted management to raise sales view for 2018.
Further, the company’s cost-saving efforts are also praiseworthy and significantly aided the company’s performance in the reported quarter.On the flip side, the company’s performance continues to face challenges from rising input costs. This has been marring investors’ optimism in the stock, which has declined 16.4% in the past six months compared with the industry’s fall of 12.8%
Quarter in Detail
The quarterly earnings of $1.71 per share came in line with the Zacks Consensus Estimate and increased almost 9% year over year.
Notably, adjusted effective tax rate in the first quarter was 22% compared with 27.5% in the year-ago quarter.
Kimberly-Clark’s sales advanced 5% to $4,731 million and surpassed the Zacks Consensus Estimate of $4,599 million. Favorable currency movements benefitted sales by 3%. Additionally, organic sales improved 2%, driven by a 3% increase in volumes and marginally offset by a 1% decline in net selling prices.
Within North America, organic sales in consumer products increased 3%, while it climbed 2% at K-C Professional. Internationally, organic sales advanced 2% across the developed market locations, while it rose 1% in developing and emerging markets.
Adjusted operating profit inched-up 0.7% to $824 million. Results were aided by higher volumes, favorable currency translations worth close to $20 million as well as reduced spending on marketing, research and general spending. Further, operating results also gained from cost savings of $90 million from the Focused On Reducing Costs Everywhere (FORCE) program. These upsides were partially offset by lower net selling prices as well as increased input costs on account of greater costs of pulp and other raw materials.