We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Kimberly-Clark (KMB) Down 2.3% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Kimberly-Clark (KMB - Free Report) . Shares have lost about 2.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Kimberly-Clark due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Kimberly-Clark Q4 Earnings Top Estimates, Dividend Raised
Kimberly-Clark reported fourth-quarter 2022 results. Adjusted earnings came in at $1.54 per share, beating the Zacks Consensus Estimate of $1.51. The bottom line rose 18% from $1.30 per share in the year-ago quarter.
Kimberly-Clark’s sales came in at $4,964 million compared with the Zacks Consensus Estimate of $4,959 million. The metric remained in line with the year-ago period figure. Unfavorable foreign currency rates affected sales by 5%. Organic sales advanced 7%, with net selling prices rising about 10%, and the product mix increasing sales by 1%. However, volumes tumbled 7%.
In North America, organic sales of consumer products climbed 1% year over year, while the same increased 18% in the K-C Professional segment. Outside North America, organic sales went up 3% in the developing and emerging (D&E) markets, and the same ascended 11% in developed markets.
The operating profit came in at $712 million, up from the $521 million reported in the year-ago quarter. Kimberly-Clark reported an adjusted operating profit of $611 million in the fourth quarter of 2022.
The operating profit declined due to a rise in input costs to the tune of $245 million. Reduced volumes, escalated marketing, research and general expenses and unfavorable foreign currency also affected the operating profit. These were somewhat offset by increased net selling prices, an improved product mix and cost savings of $115 million from the FORCE (Focused on Reducing Costs Everywhere) program.
Personal Care: Sales of $2,555 million inched down 3% year over year. Organic sales rose 2%. Net selling prices increased 7%, the product mix increased 2% and volumes declined 7%. Unfavorable foreign currency rates hurt sales by 5%. The planned exit of a private label contract this year and retailer inventory changes were a two-point downside to global Personal Care sales. Sales were flat in North America, declined 6% in D&E markets, and dropped 4% across developed markets outside North America, including Australia, South Korea and Western/Central Europe.
Consumer Tissue: Segment sales of $1,560 million remained flat year over year. Organic sales increased 5%. Net selling prices improved sales by 11%, and volumes fell 6%. Unfavorable currency rates reduced sales by 5%. Sales rose 2% in North America, while the metric dropped 1% in D&E markets. The metric fell 3% across developed markets outside North America.
K-C Professional (KCP): Segment sales gained 11% to $838 million. Organic sales jumped 16%. Net selling prices increased 20%, while the product mix benefited sales by one point. Volumes hurt sales by 5% in the segment.
Changes in currency rates hurt sales by 5%. Sales grew 17% in North America, while the same increased 3% in the D&E markets. The metric grew 1% in developed markets outside North America.
Other Financial Updates
Kimberly-Clark ended the quarter with cash and cash equivalents of $427 million, long-term debt of $7,578 million and total stockholders’ equity of $700 million. Kimberly-Clark generated cash from operating activities of $991 million during the three months ended Dec 31, 2022.
Management incurred capital expenditures of $197 million in the quarter under review and $876 million in 2022. The company expects capital spending in the band of $800-$900 million in 2023. Kimberly-Clark repurchased 0.2 million shares for $25 million in the reported quarter. In full-year 2022, the company repurchased 0.8 million shares for $100 million. Management projected share buybacks in the band of $100-$150 million for 2023. Also, it announced a 1.7% hike in its quarterly dividend, taking it to $1.18 per share. The raised dividend is payable on Apr 4, 2023.
Guidance
Net sales growth in 2023 is expected in the range of flat to 2%, while organic sales are anticipated to increase 2-4%. Unfavorable foreign currency exchange rates are likely to hurt net sales by nearly 2%. Management expects the operating profit to increase in the mid-to-high-single digits from the adjusted operating profit in 2022. This includes expectations of a $200-$300 million rise in input costs.
Further, management expects cost savings from the FORCE program to be in tandem with the year-ago period. Marketing, research and general spending are anticipated to increase due to continued business investments, including elevated advertising spending, along with general overall inflation. Currency headwinds are likely to lower the 2023 operating profit by about $300 to $400 million (or low double digits).
Management expects non-operating expenses to rise about $40 million from the adjusted non-operating expenses in 2022. Kimberly-Clark envisions 2023 earnings per share (EPS) to increase 2-6% from the adjusted EPS of 2022.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -10.37% due to these changes.
VGM Scores
At this time, Kimberly-Clark has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Kimberly-Clark has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Kimberly-Clark (KMB) Down 2.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Kimberly-Clark (KMB - Free Report) . Shares have lost about 2.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Kimberly-Clark due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Kimberly-Clark Q4 Earnings Top Estimates, Dividend Raised
Kimberly-Clark reported fourth-quarter 2022 results. Adjusted earnings came in at $1.54 per share, beating the Zacks Consensus Estimate of $1.51. The bottom line rose 18% from $1.30 per share in the year-ago quarter.
Kimberly-Clark’s sales came in at $4,964 million compared with the Zacks Consensus Estimate of $4,959 million. The metric remained in line with the year-ago period figure. Unfavorable foreign currency rates affected sales by 5%. Organic sales advanced 7%, with net selling prices rising about 10%, and the product mix increasing sales by 1%. However, volumes tumbled 7%.
In North America, organic sales of consumer products climbed 1% year over year, while the same increased 18% in the K-C Professional segment. Outside North America, organic sales went up 3% in the developing and emerging (D&E) markets, and the same ascended 11% in developed markets.
The operating profit came in at $712 million, up from the $521 million reported in the year-ago quarter. Kimberly-Clark reported an adjusted operating profit of $611 million in the fourth quarter of 2022.
The operating profit declined due to a rise in input costs to the tune of $245 million. Reduced volumes, escalated marketing, research and general expenses and unfavorable foreign currency also affected the operating profit. These were somewhat offset by increased net selling prices, an improved product mix and cost savings of $115 million from the FORCE (Focused on Reducing Costs Everywhere) program.
Personal Care: Sales of $2,555 million inched down 3% year over year. Organic sales rose 2%. Net selling prices increased 7%, the product mix increased 2% and volumes declined 7%. Unfavorable foreign currency rates hurt sales by 5%. The planned exit of a private label contract this year and retailer inventory changes were a two-point downside to global Personal Care sales. Sales were flat in North America, declined 6% in D&E markets, and dropped 4% across developed markets outside North America, including Australia, South Korea and Western/Central Europe.
Consumer Tissue: Segment sales of $1,560 million remained flat year over year. Organic sales increased 5%. Net selling prices improved sales by 11%, and volumes fell 6%. Unfavorable currency rates reduced sales by 5%. Sales rose 2% in North America, while the metric dropped 1% in D&E markets. The metric fell 3% across developed markets outside North America.
K-C Professional (KCP): Segment sales gained 11% to $838 million. Organic sales jumped 16%. Net selling prices increased 20%, while the product mix benefited sales by one point. Volumes hurt sales by 5% in the segment.
Changes in currency rates hurt sales by 5%. Sales grew 17% in North America, while the same increased 3% in the D&E markets. The metric grew 1% in developed markets outside North America.
Other Financial Updates
Kimberly-Clark ended the quarter with cash and cash equivalents of $427 million, long-term debt of $7,578 million and total stockholders’ equity of $700 million. Kimberly-Clark generated cash from operating activities of $991 million during the three months ended Dec 31, 2022.
Management incurred capital expenditures of $197 million in the quarter under review and $876 million in 2022. The company expects capital spending in the band of $800-$900 million in 2023. Kimberly-Clark repurchased 0.2 million shares for $25 million in the reported quarter. In full-year 2022, the company repurchased 0.8 million shares for $100 million. Management projected share buybacks in the band of $100-$150 million for 2023. Also, it announced a 1.7% hike in its quarterly dividend, taking it to $1.18 per share. The raised dividend is payable on Apr 4, 2023.
Guidance
Net sales growth in 2023 is expected in the range of flat to 2%, while organic sales are anticipated to increase 2-4%. Unfavorable foreign currency exchange rates are likely to hurt net sales by nearly 2%. Management expects the operating profit to increase in the mid-to-high-single digits from the adjusted operating profit in 2022. This includes expectations of a $200-$300 million rise in input costs.
Further, management expects cost savings from the FORCE program to be in tandem with the year-ago period. Marketing, research and general spending are anticipated to increase due to continued business investments, including elevated advertising spending, along with general overall inflation. Currency headwinds are likely to lower the 2023 operating profit by about $300 to $400 million (or low double digits).
Management expects non-operating expenses to rise about $40 million from the adjusted non-operating expenses in 2022. Kimberly-Clark envisions 2023 earnings per share (EPS) to increase 2-6% from the adjusted EPS of 2022.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -10.37% due to these changes.
VGM Scores
At this time, Kimberly-Clark has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Kimberly-Clark has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.