Kimberly-Clark Revenue Falls; Guides Lower
Fourth quarter 2015 net sales for income selection Kimberly-Clark Corp. (NYSE: KMB – $126.48) came in at $4.5 billion, a decrease of 6% compared to the year-ago period as changes in foreign currency exchange rates reduced sales 11%. Organic sales rose 5%, including a 9% increase in developing and emerging markets. Adjusted earnings per share for the period were $1.42 compared to $1.35 in 2014 and a penny below Street estimates. Performance benefited from organic sales growth, cost savings, input cost deflation and a lower share count. Comparisons were negatively impacted by unfavorable foreign currency exchange rate effects, increased marketing, research and general spending on a local currency basis and higher expense in other areas. Full-year adjusted earnings per share were $5.76 in 2015, up 5% compared to earnings per share of $5.51 a year ago. Looking ahead, Kimberly-Clark forecast per-share earnings would rise to between $5.95 and $6.15 a share this quarter, compared with the average analyst estimate of $6.14 a share. Sales are expected to either fall 3% or be flat, owing largely to the stronger dollar.
Despite significant global economic headwinds, KMB shares were able to move higher over the past fifty-two weeks by over 12% and the dividend added another 2.83%. I believe this issue has some room to grow to late decade. Plus, Kimberly-Clark’s defensive characteristics, strong balance sheet and relative safety give it ample appeal for conservative income investors.