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Kimberly-Clark (KMB) Q3 Earnings: High Input Costs a Worry
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Kimberly-Clark Corporation (KMB - Free Report) is slated to release third-quarter 2018 results on Oct 22. This renowned personal care products company has surpassed earnings estimates in three out of the trailing four quarters. Let’s see how things are placed ahead of the upcoming quarterly results.
Robust Savings Efforts
Kimberly-Clark is keen on reducing costs through Focus on Reducing Costs Everywhere program or FORCE. The program has generated higher cost savings each year with a record of $450 million in 2017. During the second quarter of 2018, Kimberly-Clark generated savings of $110 million from the program.
Further, management is encouraged about the 2018 Global Restructuring Program, which marks the company’s biggest restructuring in a long time. The plan is likely to enhance the company’s underlying profitability, enable it to compete better and provide greater flexibility to undertake growth-oriented investments. During the second quarter, the company generated savings of roughly $40 million from the restructuring program and expects 2018 savings in the range of $100-$120 million. Further, the company expects pre-tax savings of $500 million to $550 million from this program by the end of 2021, backed by production supply chain efficiencies and reduction in workforce. Moreover, as part of restructuring efforts, management is on track with exiting low-margin businesses that deliver about 1% of net sales, primarily concentrated in the consumer tissue unit.
On a combined basis, the company expects cost savings of more than $2 billion from the FORCE and 2018 Global Restructuring programs over the next four years. Further, backed by such well-chalked endeavors, management raised 2018 cost-savings outlook to $425-450 million, from the previous projection of $400 million. Also, the company expects to generate cost-savings of more than $1.5 billion between 2018 and 2021.
Undoubtedly, Kimberly-Clark’s saving-related initiatives are quite impressive and are playing a vital role in driving profits. We expect that such efforts will boost the bottom-line performance in the upcoming quarterly release.
Kimberly-Clark Corporation Price, Consensus and EPS Surprise
Apart from keeping a check on costs, Kimberly-Clark is also focusing to improve the core consumer products business, accelerate growth in the Personal Care segment in developing and emerging markets as well as enhance digital and e-commerce capacities. Moreover, to stay as a key player in several consumer product categories, the company regularly engages in innovation. In this respect, it frequently introduces upgrades and makes new launches in the diaper category.
High Input Costs & Lower Net Selling Pose Worries
Higher input costs have been troubling Kimberly-Clark for a while. Evidently, commodity cost inflation of $200 million, stemming from greater costs of pulp and other raw materials have weighed on the company’s adjusted operating profit in the second quarter. Higher commodity costs have also been marring gross margin performance, which has been dismal for almost a year now. Apart from Kimberly-Clark, other companies in the consumer staples space such as Pilgrim's Pride Corporation (PPC - Free Report) , Church & Dwight Co (CHD - Free Report) and TreeHouse Foods (THS - Free Report) have also been struggling with higher commodity costs.
Additionally, the company has been bearing the brunt of lower net selling prices for a while. In second-quarter 2018, the trend lingered and hurt organic sales. Also, lower net selling prices in the Personal Care segment weighed upon sales and operating profit.
Management expects the aforementioned factors to weigh on performance in the forthcoming periods. It accordingly trimmed earnings and net sales view for 2018. This will mar prospects for the upcoming quarterly announcement.
Incidentally, the Zacks Consensus Estimate for sales for the impending period is currently pegged at $4,544 million, reflecting a year-on-year decline of 2.1%. Further, the Zacks Consensus Estimate for third-quarter earnings depicts a downtrend in the past 30 days. The consensus mark for the bottom line is currently pegged at $1.64. Nevertheless, this estimate depicts year-on-year growth of 2.5%. We expect that the company’s bold efforts toward curtailing costs will aid cushioning the aforementioned hurdles.
Let’s now take a look at the Zacks Model for the upcoming quarterly announcement.
Zacks Model
Our proven model doesn’t show that Kimberly-Clark is likely to beat bottom-line estimates in the upcoming quarterly results. For this to happen, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Although Kimberly-Clark currently carries a Zacks Rank #3 (Hold), its Earnings ESP of -0.92%. makes us less confident regarding earnings beat this time. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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Kimberly-Clark (KMB) Q3 Earnings: High Input Costs a Worry
Kimberly-Clark Corporation (KMB - Free Report) is slated to release third-quarter 2018 results on Oct 22. This renowned personal care products company has surpassed earnings estimates in three out of the trailing four quarters. Let’s see how things are placed ahead of the upcoming quarterly results.
Robust Savings Efforts
Kimberly-Clark is keen on reducing costs through Focus on Reducing Costs Everywhere program or FORCE. The program has generated higher cost savings each year with a record of $450 million in 2017. During the second quarter of 2018, Kimberly-Clark generated savings of $110 million from the program.
Further, management is encouraged about the 2018 Global Restructuring Program, which marks the company’s biggest restructuring in a long time. The plan is likely to enhance the company’s underlying profitability, enable it to compete better and provide greater flexibility to undertake growth-oriented investments. During the second quarter, the company generated savings of roughly $40 million from the restructuring program and expects 2018 savings in the range of $100-$120 million. Further, the company expects pre-tax savings of $500 million to $550 million from this program by the end of 2021, backed by production supply chain efficiencies and reduction in workforce. Moreover, as part of restructuring efforts, management is on track with exiting low-margin businesses that deliver about 1% of net sales, primarily concentrated in the consumer tissue unit.
On a combined basis, the company expects cost savings of more than $2 billion from the FORCE and 2018 Global Restructuring programs over the next four years. Further, backed by such well-chalked endeavors, management raised 2018 cost-savings outlook to $425-450 million, from the previous projection of $400 million. Also, the company expects to generate cost-savings of more than $1.5 billion between 2018 and 2021.
Undoubtedly, Kimberly-Clark’s saving-related initiatives are quite impressive and are playing a vital role in driving profits. We expect that such efforts will boost the bottom-line performance in the upcoming quarterly release.
Kimberly-Clark Corporation Price, Consensus and EPS Surprise
Kimberly-Clark Corporation Price, Consensus and EPS Surprise | Kimberly-Clark Corporation Quote
Other Growth Initiatives
Apart from keeping a check on costs, Kimberly-Clark is also focusing to improve the core consumer products business, accelerate growth in the Personal Care segment in developing and emerging markets as well as enhance digital and e-commerce capacities. Moreover, to stay as a key player in several consumer product categories, the company regularly engages in innovation. In this respect, it frequently introduces upgrades and makes new launches in the diaper category.
High Input Costs & Lower Net Selling Pose Worries
Higher input costs have been troubling Kimberly-Clark for a while. Evidently, commodity cost inflation of $200 million, stemming from greater costs of pulp and other raw materials have weighed on the company’s adjusted operating profit in the second quarter. Higher commodity costs have also been marring gross margin performance, which has been dismal for almost a year now. Apart from Kimberly-Clark, other companies in the consumer staples space such as Pilgrim's Pride Corporation (PPC - Free Report) , Church & Dwight Co (CHD - Free Report) and TreeHouse Foods (THS - Free Report) have also been struggling with higher commodity costs.
Additionally, the company has been bearing the brunt of lower net selling prices for a while. In second-quarter 2018, the trend lingered and hurt organic sales. Also, lower net selling prices in the Personal Care segment weighed upon sales and operating profit.
Management expects the aforementioned factors to weigh on performance in the forthcoming periods. It accordingly trimmed earnings and net sales view for 2018. This will mar prospects for the upcoming quarterly announcement.
Incidentally, the Zacks Consensus Estimate for sales for the impending period is currently pegged at $4,544 million, reflecting a year-on-year decline of 2.1%. Further, the Zacks Consensus Estimate for third-quarter earnings depicts a downtrend in the past 30 days. The consensus mark for the bottom line is currently pegged at $1.64. Nevertheless, this estimate depicts year-on-year growth of 2.5%. We expect that the company’s bold efforts toward curtailing costs will aid cushioning the aforementioned hurdles.
Let’s now take a look at the Zacks Model for the upcoming quarterly announcement.
Zacks Model
Our proven model doesn’t show that Kimberly-Clark is likely to beat bottom-line estimates in the upcoming quarterly results. For this to happen, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Although Kimberly-Clark currently carries a Zacks Rank #3 (Hold), its Earnings ESP of -0.92%. makes us less confident regarding earnings beat this time. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>