posted a small decline in third-quarter earnings Wednesday, despite an increase in revenue. The company cited a competitive environment, but said it expects full-year 2003 earnings to be in line with analysts' estimates.
The consumer products company earned $419.7 million, or 83 cents a share, in the three months ended Sept. 30, below last year's earnings of $441.2 million, or 85 cents a share. Before certain items, the Dallas-based company earned $431.1 million, or 85 cents a share, compared with $449.4 million, or 87 cents a share, in the prior-year quarter. Analysts had forecast 84 cents a share.
The company said results in the quarter were hurt by higher noncash pension expense of about $35 million.
Total sales were $3.6 billion, up 4%. Kimberly-Clark cited 3% higher currency exchange rates and 2% higher sales volume. Also, net selling prices were down about 1% due an increase in competitive promotional spending. The company said its three business segments -- consumer tissue, personal care and business-to-business -- had increases in sales.
Sales volume was positively impacted by shipments of new and improved products, the company said. "Sales volumes of Huggies diapers in North America were up 5% sequentially and third quarter shipments of Pull-Ups training pants in North America set an all-time quarterly record," said Chief Executive Thomas Falk.
Sales volume also benefited from the consolidation of Klabin Kimberly S.A., the company's former equity affiliate in Brazil. In August 2003, the company upped its ownership of Klabin Kimberly S.A. to 100% from 50%, which added about 1% to sales in the quarter.
Looking ahead, Falk said: "Given the intensity of the competitive environment in our categories, we remain focused on increasing sales volumes and aggressively reducing costs over the balance of the year."
In the fourth quarter, the company said profit from its consumer tissue unit will be pressured by higher fiber costs and continued high levels of promotion spending.
Falk said the company is comfortable with analysts' earnings expectations for full-year 2003 of $3.32 a share. Kimberly-Clark earned $3.36 a share in 2002.
Shares of the company closed at $51.02 Tuesday on the
New York Stock Exchange