warned on Wednesday that it wouldn't meet its fourth-quarter financial targets, due to increased competition in the diaper market and weaker sales at its Latin American and Asian operations.
The Dallas-based company, which makes Huggies diapers and Kleenex tissues, said it expects to post a net profit, before one-time items, of 72 cents to 76 cents a share in the fourth quarter, compared with previous guidance of a profit of 82 cents to 86 cents. Wall Street analysts, on average, were expecting the company to earn 84 cents a share, according to Thomson Financial/First Call. Total revenue for the quarter is expected to fall slightly from the year-ago quarter, when the company recorded $3.67 billion in revenue. Analysts are currently projecting fourth-quarter sales of $3.41 billion.
"About half of the guidance shortfall is attributable to lower sales volumes as a result of competitive challenges in our diaper and training pants businesses in North America and Europe, including lost sales momentum in October and early November as we implemented package count changes in North America," said President and Chief Executive Thomas J. Falk in a prepared statement.
Looking ahead, the company said it plans to cut costs by $175 million to $200 million in 2003, or approximately 24 cents to 28 cents a share. Sales are expected to rise in the low- to mid-single digits, with sales volumes up 3% to 5% on the launch of new products and targeted promotional spending. Kimberly-Clark also trimmed its capital spending budget to a range of $850 million to $900 million, down from the previous estimate of about $1 billion.
The shares were recently down 57 cents, or 1.2%, at $47.36 on the
New York Stock Exchange..