US: Kimberly-Clark Says Not Interested In Clorox, As Q2 Profit Slumps
Kimberly-Clark has said it has no intentions in making a bid to acquire Clorox, even as it unveiled weak second-quarter results after being hurt by higher commodity costs.
CEO Tom Falk said Kimberly-Clark has no plans to make big acquisitions, and in particular, of Clorox. The company has been named as a possible suitor for Clorox, which is the target of attention by activist investor Carl Icahn, but Falk said Clorox is a “well- managed company” and he saw no need to buy it.
His comments came after Kimberly-Clark revealed that net profit for the second quarter fell by 18% to $408m ($1.03 a share), although underlying profit amounted to $1.18 a share. Sales however were up 8.3% to $5.26bn, although the weakness of the dollar provided a 5% increase.
Sales at the personal-care segment rose by 7%, the Kimberly-Clark Professional unit registered a 6% rise, and the health-care business saw sales jump 14%. Falk said consumers are beginning to “spend a little bit more for a little luxury or something that’s a little bit better for their family. Overall, I would say, it’s getting slowly better.”
The company has been raising prices on most items in North America to offset costs, which are now expected to amount to $750m this year (compared to forecasts of $550m), and Falk said full-year adjusted profit is “more likely” to fall towards the lower half of its previously forecast range of $4.80 to $5.05 a share.
However, he also added that the company will continue to cut costs, and is now expected to save up to $350m this year, from its earlier target of up to $300m. Further, the group now expects sales to be up 5-7% for the year, up from a forecast of 4-6% growth, due again due to the weaker dollar.
NamNews - Tuesday 26th July 2011