Back to top

Image: Bigstock

Things to Note Ahead of Kimberly-Clark's (KMB) Q4 Earnings

Read MoreHide Full Article

Kimberly-Clark Corporation (KMB - Free Report) is slated to report fourth-quarter 2019 results on Jan 23. This consumer products company delivered a positive earnings surprise of 2.2% in the last reported quarter. Further, its earnings have outperformed the Zacks Consensus Estimate by 1.8%, on average, in the trailing four quarters.

The Zacks Consensus Estimate for fourth-quarter earnings has moved up a penny to $1.70 over the past 30 days. This suggests an increase of 6.3% from the year-ago period’s reported figure. However, the consensus mark for revenues stands at $4,508 million, indicating a drop of 1.3% from the figure reported in the year-ago period.

Kimberly-Clark Corporation Price and EPS Surprise

Kimberly-Clark Corporation Price and EPS Surprise

Kimberly-Clark Corporation price-eps-surprise | Kimberly-Clark Corporation Quote

Key Factors to Note

Kimberly-Clark’s focus on lowering costs through its 2018 Global Restructuring Program as well as the Focus on Reducing Costs Everywhere or FORCE Program bodes well. The Global Restructuring Program is aimed at simplifying the supply chain and manufacturing structures. Management earlier stated that it expects pre-tax savings of $500-$550 million from this program by the end of 2021, backed by production supply-chain efficiencies and reduction in workforce. Moreover, the FORCE Program has been generating solid cost savings for a while. Markedly, such saving efforts have been helping the company counter rising cost challenges.

Apart from this, the company has been progressing well with its three key strategic growth pillars. These include improving its core business in the developed markets, speeding up growth of the Personal Care segment in developing and emerging markets, and enhancing digital and e-commerce capacities. These initiatives have been aiding Kimberly-Clark’s portfolio and expanding the global business. Such upsides, along with a focus on product innovation, bode well.

However, Kimberly-Clark’s K-C Professional segment has been grappling with dismal sales. Segment sales have been bearing the brunt of adverse currency rates and several business exits as part of the company’s 2018 Global Restructuring Plan. The Zacks Consensus Estimate for fourth-quarter revenues of this segment stands at $816 million, suggesting a decline of almost 3% from $841 million reported in the fourth quarter of 2018.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Kimberly-Clark this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Kimberly-Clark carries a Zacks Rank #3, its Earnings ESP of -0.94% makes surprise prediction difficult.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Procter & Gamble (PG - Free Report) currently has an Earnings ESP of +0.91% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tyson Foods (TSN - Free Report) currently has an Earnings ESP of +1.77% and a Zacks Rank #3.

Church & Dwight (CHD - Free Report) presently has an Earnings ESP of +2.00% and a Zacks Rank #3.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”

Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.6% per year. So be sure to give these hand-picked 7 your immediate attention.

See 7 handpicked stocks now >>

Published in