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Kimberly Clark Corporation (KMB - Analyst Report) is set to report second quarter 2014 results on Jul 22. Last quarter it posted in-line results. Let's see how things are shaping up for this announcement.

Factors to Consider this Quarter

Kimberly-Clark’s cost saving initiatives, lower selling expenses, and continued product innovation have been driving earnings in the past five quarters and made up for increased input costs and currency headwinds. The company also achieved higher organic sales on the back of volume growth and better pricing in all these quarters. We expect these positives to drive earnings in the second quarter of 2014 as well.

Investors are encouraged by the company’s initiatives to control costs through its FORCE program and a restructuring initiative, which are likely to improve underlying profitability and return on invested capital at its consumer tissue and K-C Professional segments. Profits of these two segments have been declining for many years. Kimberly Clark’s restructuring and cost savings initiatives helped reduce costs and led to higher operating profit in both 2012 and 2013. The company is also well positioned overseas and expanded its presence in key emerging markets through the K-C International segment in the past several quarters.

However, the macroeconomic headwinds including lower consumer spending patterns stemming from an unfavorable macroeconomic environment and adverse currency rates persist. The rise in input prices also has a direct impact on the company's profits.

Earnings Whispers?

Our proven model does not conclusively show that Kimberly-Clark is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP:ESP for Kimberly-Clark is 0.00% as both the Most Accurate Estimate and Zacks Consensus Estimate stand at $1.49 per share.

Zacks Rank #3 (Hold):Kimberly-Clark’s Zacks Rank #3 when combined with an ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Other stocks in the consumer staples sector that have both a positive earnings ESP and a favorable Zacks Rank are:

Dr Pepper Snapple Group, Inc. (DPS - Analyst Report), with Earnings ESP of +3.30% and a Zacks Rank #3.

The Coca-Cola Company (KO - Analyst Report), with Earnings ESP of +4.76% and a Zacks Rank #3.

Energizer Holdings, Inc. (ENR - Analyst Report), with Earnings ESP of +1.29% and a Zacks Rank #3. 

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