Irving-based Kimberly-Clark Co. moved quickly to reassure stockholders today after consumer-products competitor Procter & Gamble Co. warned of flat earnings and announced that its chief executive was stepping down immediately.
Proctor & Gamble's announcement sent its investors scurrying. Shares of Cincinnati-based P&G were down $5, or 8.1 percent, at $56.87 in early afternoon trading. Procter & Gamble hit its 52-week high of $118.38 on Jan. 12.
Buffeted by fallout from a previous earnings warning from Procter & Gamble, Kimberly-Clark issued a news release reaffirming its own expectations for this year and beyond. It said it still expects to show top-line revenue growth of 6 percent to 8 percent for the year and double-digit growth in earnings per share from operations in 2000 and beyond.
"We had an excellent first quarter and are off to a good start this quarter, with excellent volume growth, productivity gains and rigorous cost controls driving improved results," chairman and chief executive officer Wayne Sanders said in a news release.
"We have met or beaten expectations for the past seven quarters, and have every intention of keeping that streak going," he said.
Stephen Keane, an analyst with Robert W. Baird & Co., said that Kimberly-Clark is doing "extremely well."
"I think they made the announcement because the last time P&G made a similar announcement, Kimberly's stock got hit," Mr. Keane said.
Mr. Keane also said that Proctor & Gamble's troubles stem mainly from its carpeting and home care products, an area that Kimberly-Clark is not involved in.
"What Proctor & Gamble tried to do was introduce too many new products," he said. "Kimberly-Clark is not in the same boat."
Kimberly-Clark stock edged down 81 cents to $57.87 in mid-afternoon trading.
Procter & Gamble's announcement today included the departure of CEO Durk Jager after only a year and a half in the job. His successor is a senior P&G executive, Alan G. "A.G." Lafley.
Procter & Gamble said it expects fourth quarter core net earnings per diluted share to be flat from a year ago, compared with the company's previous estimate of an increase of 15 percent to 17 percent increase.
In March, Procter & Gamble surprised investors by lowering earnings projections for the second half of its fiscal year, citing higher costs, an aggressive pricing environment and other factors.
In April, the company met its revised expectations, reporting third-quarter earnings of 64 cents a diluted share. Procter & Gamble's shares, though, fell 8.8% that day because the company again surprised Wall Street by forecasting that income from operations would be flat or down in the fourth quarter.
A First Call/Thomson Financial survey of 11 analysts produced a mean earnings estimate of $3.03 a share for the current fiscal year, which ends June 30.
Victor Godinez is a free-lance writer based in Irving. Dow Jones News Service contributed to this report.