The Clorox Company Earnings Cheat Sheet: Margins Shrink Again, Net Income Falls

S&P 500 (NYSE:SPY) component The Clorox Company (NYSE:CLX) reported its results for the first quarter. Clorox manufactures consumer products that are sold primarily through mass merchandisers, grocery stores, and other retail outlets.

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The Clorox Company Earnings Cheat Sheet for the First Quarter

Results: Net income for the housewares and accessories company fell to $130 million (98 cents per share) vs. $216 million ($1.52 per share) a year earlier. This is a decline of 39.8% from the year earlier quarter.

Revenue: Rose 3.1% to $1.3 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CLX beat the mean analyst estimate of 92 cents per share. Analysts were expecting revenue of $1.29 billion.

Quoting Management: “I’m pleased with our start to the fiscal year,” said Chairman and CEO Don Knauss. “We delivered our third consecutive quarter of volume and sales growth, with diluted EPS from continuing operations equal to the year-ago quarter. Although our U.S. categories are still in slight decline, they are improving. Importantly, we continue to grow U.S. market shares.”

Key Stats:

The company has now seen net income fall in each of the last four quarters. In the fourth quarter of the last fiscal year, net income fell 1.2% while the figure fell 8.5% in the third quarter of the last fiscal year and 80.9% in the second quarter of the last fiscal year.

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 2.5 percentage points to 41.8% from the year earlier quarter. Over that time, margins have contracted on average 1.6 percentage points per quarter on a year-over-year basis.

A year-over-year revenue increase last quarter snaps a streak of four consecutive quarters of revenue declines. The worst quarter in that span was the second quarter of the last fiscal year, which saw a 7.8% decrease.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 10 cents in the fourth quarter of the last fiscal year, by one cent in the third quarter of the last fiscal year, and by 6 cents in the second quarter of the last fiscal year.

Looking Forward: Analysts have a more positive outlook for the company’s next quarter performance. Over the past month, the average estimate for the second quarter has gone up from 67 cents per share to 68 cents. For the fiscal year, the average estimate has moved up from $4.07 a share to $4.08 over the last sixty days.

Competitors to Watch: Zep, Inc. (NYSE:ZEP), The Procter & Gamble Co. (NYSE:PG), Church & Dwight Co., Inc. (NYSE:CHD), Colgate-Palmolive (NYSE:CL), Kimberly-Clark (NYSE:KMB), Ocean Bio-Chem, Inc. (NASDAQ:OBCI), PURE Bioscience (NASDAQ:PURE).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)