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Kimberly-Clark misses second-quarter estimates as commodity costs hurt profits

Last updated: 23:36 24 Jul 2018 AEST, First published: 23:12 24 Jul 2018 AEST

Kleenex boxes on store shelf
Its brand portfolio includes household names like Kleenex, Huggies and Cottonelle

Kimberly-Clark Corporation (NYSE:KMB) announced lower-than-expected second-quarter earnings Tuesday as commodity costs weigh down profits.

The consumer goods company reported earnings of US$1.30 per share on revenue of US$4.60bn, compared with US$1.49 on revenue of US$4.58bn in the previous year’s second quarter.

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The Dallas-based company fell below Wall Street estimates of US$1.57 EPS on revenue of US$4.62bn.

Its brand portfolio includes household names such as Kleenex tissues, Huggies diapers and Cottonelle toilet paper.

Shares were down more than 2.5% to US$102.66 in Tuesday pre-market trading.

Commodity costs on the rise

Higher commodity costs have put a damper on its full-year earnings guidance. For the year ahead, the company expects earnings between US$6.60 and US$6.80 compared with prior guidance between US$6.90 and US$7.20.

“Given these headwinds, we will continue to aggressively manage costs and evaluate further opportunities to increase net selling prices,” said CEO Thomas J. Falk in a press release.

Input costs are forecast to be between US$675mln and US$775mln compared with its previous estimate of US$400mln and US$550mln.

Net sales are expected to be flat up to 1% versus the previous expectation of an increase between 2% and 3%.

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