Kimberly-Clark's third-quarter results increase

Monday, October 25th 2004, 9:38 am

By: News On 6

DALLAS (AP) _ Consumer goods maker Kimberly-Clark said Monday that its earnings in July through September rose 5 percent despite tough price competition in its key diaper market. But the results, and the company's outlook, still fell short of expectations.

Kimberly-Clark, the maker of Kleenex and Huggies which was formerly headquartered at Neenah, Wis., and still has operations in Wisconsin, said it earned $441.3 million or 89 cents per share, compared to $419.7 million or 83 cents per share a year earlier.

Analysts surveyed by Thomson First Call had forecast profit of 90 cents per share.

In trading Monday morning, Kimberly-Clark shares were down $2.16, or 3.4 percent, at $60.90 on the New York Stock Exchange. The stock has traded between $50.75 and $69 in the past 52 weeks.

Kimberly-Clark said that if it had recognized the fair value of stock options to employees, earnings would have been $431.7 million or 87 cents per share, compare to $406.6 million or 80 cents per share a year ago.

Revenue was $3.87 billion, matching analysts' expectation and a 6.2 percent gain over the $3.64 billion in sales a year ago.

Chairman and chief executive Thomas J. Falk said fourth-quarter earnings would be 89 cents to 91 cents per share _ below the 95 cents forecast by analysts _ including a loss of 4 cents to 5 cents per share for selling its pulp and paper operations. Falk also said the company would pay higher costs for energy and raw materials.

Falk said the company would benefit from rising prices it charges consumers for tissues but that competition for sales of diapers and training pants would remain intense.

For the full year, Falk said the company would hit its target range of $3.55 to $3.65 per share in earnings. Analysts expect $3.66 per share.

In the just completed quarter, Kimberly-Clark, based in suburban Dallas, said earnings rose on higher sales and currency fluctuations that boosted the value of foreign profits. That helped the company overcome price-slashing in the diaper market, where it is battling rival Procter & Gamble Co.

The company said revenue gains were helped by record sales of GoodNites training pants for toddlers, double-digit gains in North American sales of incontinence products such as Poise and Depend, and increase in health care products.

Kimberly-Clark's effective tax rate fell to 24.5 percent from 27.8 percent last year, mostly due to benefits of owning an interest in a synthetic fuel partnership, adding about 1 cent per share to earnings.

For the first nine months of the year, Kimberly-Clark earned $1.35 billion or $2.70 per share, compared to $1.23 billion or $2.42 per share, in the same period last year. Revenue rose 7.5 percent, to $11.44 billion from $10.65 billion.