Kimberly-Clark announces Q3 results, net sales down over 2017
By P&PC Staff
By P&PC Staff
October 23, 2018 – Kimberly-Clark has announced its third-quarter financial results, reporting a reduction in net sales compared to Q3 2017.
Sales of $4.6 billion in the third quarter of 2018 were down two per cent compared to the year-ago period. Changes in foreign currency exchange rates reduced sales by three per cent. Organic sales increased one per cent year-on-year. Net selling prices and product mix each improved one per cent, while volumes fell one per cent. In North America, organic sales decreased one per cent in consumer products and increased slightly in K-C Professional. Outside North America, organic sales rose three per cent in developing and emerging markets and one per cent in developed markets.
Diluted net income per share for the third quarter of 2018 was $1.29. Third quarter adjusted earnings per share were $1.71 in 2018, an increase of seven per cent compared to diluted net income per share of $1.60 in 2017.
Diluted net income per share for 2018 is anticipated to be $3.29 to $3.79.
The company continues to target full-year 2018 organic sales growth of approximately one per cent and adjusted earnings per share of $6.60 to $6.80, a year-on-year increase of six to nine per cent.
Chairman and chief executive officer Thomas J. Falk says, “While our profitability was impacted by significant commodity and currency headwinds, we continue to launch innovations, pursue our growth priorities and invest in our brands for long-term success. We also continue to manage our company with financial discipline, as we generated total cost savings of $145 million, reduced discretionary spending and returned approximately $520 million to shareholders through dividends and share repurchases. For the full year, we are confirming our previous outlook for organic sales growth and adjusted earnings per share.
Third quarter operating profit was $669 million in 2018, including charges related to the 2018 Global Restructuring Program. Third quarter adjusted operating profit was $798 million in 2018 compared to operating profit of $868 million in 2017. Results were impacted by $210 million of higher input costs, driven by $115 million in pulp and $65 million in other raw materials.
In addition, foreign currency translation effects decreased operating profit by $15 million and transaction effects also negatively impacted the comparison. On the other hand, results benefited from organic sales growth, $105 million of cost savings from the company’s FORCE (Focused On Reducing Costs Everywhere) program and $40 million of cost savings from the 2018 Global Restructuring Program. The comparison also benefited from lower general and administrative costs.
The third quarter effective tax rate was 23.9 per cent in 2018. The adjusted effective tax rate was 19.6 per cent in the third quarter of 2018 compared to the effective tax rate of 28.8 per cent in the third quarter of 2017. The comparison benefited from U.S. tax reform, along with planning initiatives.
Read the full report here.