Like Colgate, Kimberly-Clark was able to manage the higher-cost environment with price hikes that didn’t turn off customers and hurt volume.
The maker of Kleenex tissues and Huggies diapers, among many other well-known brands, also successfully curbed costs. That helped profit grow despite flat sales, which, like most international companies, was hit by the effects of a stronger dollar.
For the most recent quarter, Kimberly-Clark reported a 22% rise in net income to $498 million, or $1.26 a share. Excluding items, earnings came to $1.30 a share, beating the Street’s forecast by 2 cents.
Revenue barely budged, coming in at $5.27 billion versus $5.26 billion last year, but that still squeaked past analysts’ average estimates.
Of course, stocks are forward-looking, so the best news out of Kimberly-Clark was that it raised its earnings outlook for the fiscal year. The company is now guiding a full 5 cents a share higher on either side of its earnings-range target — up to $5.05 to $5.20 from $5 to $5.15 — thanks to better-than-expected sales and lower-than-expected prices for pulp, the key component of tissues and toilet paper.
Shares in KMB popped more than 3% after the report, but the dividend still was yielding a healthy 3.4%.
McGraw-Hill, best-known as the owner of credit ratings agency Standard & Poor’s, clobbered Street estimates by 9 cents a share.
The company is splitting into two business — one for financial information and the other in educational publishing — and it’s looking like a smart move. Greater demand for market data and news drove the better-than-expected bottom line, while weak results from education caused the top-line to miss estimates.
Second-quarter net income rose more than 2% to $216 million, or 76 cents a share, from $211.1 million, or 68 cents, in the year-ago period. On an adjusted basis, earnings came to 85 cents, far better than analysts’ average estimate of 76 cents.
Revenue fell to $1.55 billion from $1.56 billion, hurt by a double-digit percent drop in sales at the education publishing division. Analysts were looking for revenue to increase to $1.59 billion.
However, McGraw-Hill soothed the Street by affirming that its full-year earnings would come in near the high end of its prior guidance of $3.25 to $3.35 a share. That helped propel shares to early gains of almost 4% — and the dependable dividend was still throwing off a solid 2%.
As of this writing, Dan Burrows held none of the securities mentioned here.