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Clorox Guidance Disappoints

The company's forecast for 2005 overshadows strong third-quarter results.
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(CLX) - Get Clorox Company Report

fell more than 2% Thursday even after the company posted its best quarterly sales gain in two years.

Shares fell $1.14, or 2.2%, to $51.18, as the company's 2005 guidance fell short of analysts' forecasts.

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Clorox earned $126 million, or 59 cents a share, in its fiscal third quarter, compared with $110 million, or 50 cents a share, a year ago. Revenue grew 7% to $1.08 billion from $1.02 billion. Analysts expected the Oakland, Calif.-based company to earn 56 cents a share, according to Thomson First Call.

Gross margin declined 40 basis points to 45.1% because of higher costs for raw materials, warehousing and transportation. Its international household products unit led the way with 13% sales growth, partly because of favorable exchange rates.

The company, best known for its bleach, said it still expected EPS of 82 cents to 85 cents a share in the fourth quarter, which compares favorably with analysts' forecast of 83 cents a share.

But Clorox expects to earn of 53 cents to 55 cents a share in the first quarter of 2005 and $2.58 to $2.66 for its 2005 fiscal year, below the consensus estimates of 67 cents and $2.76, respectively.