Kimberly-Clark Corporation today reported third quarter 2011 results and updated its full-year 2011 key planning assumptions.
Third quarter 2011 net sales were an all-time record $5.4 billion and increased 8 percent. Organic sales, which exclude the impact of changes in foreign currency rates, rose 4 percent, driven by higher net selling prices. The organic growth was highlighted by an 11 percent increase in K-C International.
Diluted net income per share for the quarter was $1.09 compared with $1.14 in the year-ago period. Third quarter adjusted earnings per share were $1.26 in 2011.
Adjusted earnings per share in the third quarter increased 11 percent compared to diluted net income per share in the prior year. Third quarter adjusted earnings per share benefited from sales growth, cost savings, a lower share count and a reduced effective tax rate, partially offset by significant input cost inflation and lower net income from equity companies.
The company is now targeting 2011 adjusted earnings per share in a range of $4.80 to $4.90. The company's previous expectation was that adjusted earnings per share were more likely to be in the lower half of the guidance range of $4.80 to $5.05. Adjusted earnings per share for the third quarter and full-year 2011 exclude costs for certain items described later in this news release.
Chairman and Chief Executive Officer Thomas J. Falk said, "While we are not on track with all of our goals this year, I'm encouraged that execution of our Global Business Plan strategies enabled us to deliver four percent growth in organic sales and double-digit growth in adjusted earnings per share in the third quarter. Our focus on targeted growth initiatives, revenue realization and cost reduction allowed us to overcome significant input cost inflation and softer-than-expected demand in portions of the developed markets. Our market positions remain solid overall and our innovation and marketing programs are on track. We also continue to generate strong cash flow."
Falk added, "Looking ahead, we expect our momentum with revenue realization and targeted growth initiatives to continue, led by K-C International. We will also continue to focus on delivering cost savings, reducing overhead spending and generating significant cash flow. Given recent input cost changes, we are now expecting less commodity cost inflation in 2011 than previously estimated. On the other hand, based on third quarter results and current market conditions, we have reduced our full-year volume estimates somewhat for portions of the developed markets. In addition, as a result of the recent strengthening of the U.S. dollar, we are now assuming less benefit this year from foreign currency exchange rates. Despite the challenging near-term economic conditions, we will continue to execute our Global Business Plan in order to improve shareholder value."
