Kimberly-Clark Corporation Earnings: Shrinking Margins for Fifth Consecutive Quarter, Net Income Falls

S&P 500 (NYSE:SPY) component Kimberly-Clark Corporation (NYSE:KMB) reported its results for the fourth quarter. Kimberly-Clark manufactures and markets a range of mostly paper-based consumer products.

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Kimberly-Clark Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the personal products company fell to $401 million ($1.01 per share) vs. $492 million ($1.20 per share) a year earlier. This is a decline of 18.5% from the year earlier quarter.

Revenue: Rose 2% to $5.18 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: KMB reported adjusted net income of $1.28 per share. By that measure, the company was about in line with expectations as the mean analyst estimate was $1.29 per share. Analysts were expecting revenue of $5.22 billion.

Quoting Management: Chairman and Chief Executive Officer Thomas J. Falk said, “We delivered solid improvements in organic sales, adjusted operating profit margin and adjusted earnings per share in the fourth quarter despite a continued challenging environment. Reflecting on the full year, bottom-line results were somewhat below our original goal for the year, mostly due to higher-than-expected cost inflation and soft demand in portions of the developed markets.”

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 2.6 percentage points to 29.8% from the year earlier quarter. Over that time, margins have contracted on average 3.1 percentage points per quarter on a year-over-year basis.

Revenue has risen the past four quarters. Revenue increased 8.1% to $5.38 billion in the third quarter. The figure rose 8.3% in the second quarter from the year earlier and climbed 4% in the first quarter from the year-ago quarter.

The company fell short of estimates last quarter after being in line with expectations the quarter before with net income of $1.26.

Net income has dropped 10.7% year over year on average across the last five quarters. Performance was hurt by an 18.5% decline in the most recent quarter from the year earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from $1.20 a share to $1.19 over the last seven days. For the fiscal year, the average estimate has moved down from $4.83 a share to $4.82 over the last ninety days.

Competitors to Watch: The Procter & Gamble Co. (NYSE:PG), Cardinal Health, Inc. (NYSE:CAH), Church & Dwight (NYSE:CHD), Colgate-Palmolive (NYSE:CL), Clorox (NYSE:CLX), Johnson & Johnson (NYSE:JNJ), Zep (NYSE:ZEP) and Avon Products (NYSE:AVP)..

Investing Insights: Will the iPad 3 Be the Next Catalyst for Apple’s Stock?

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com