Clorox Beats on Volume Growth

OAKLAND, Calif. ( TheStreet) -- Clorox ( CLX) beat fourth-quarter profit expectations thanks to higher sales, a lower tax rate and share repurchases.

Clorox said early Wednesday its quarterly profit actually fell 1.2% to $169 million, but the figure still topped analysts' consensus call by more than $10 million. On a per share basis, earnings grew 5% to $1.26 per share, from $1.20 per share, as Clorox repurchased 2.7 million shares of the company's common stock for $183 million in the recent quarter.

Fourth-quarter revenue increased 3.5% to a better-than-expected $1.48 billion, from $1.43 billion. Sales grew in all four of Clorox's business segments.

Clorox shares were unchanged in premarket trading Wednesday after the stock closed lower in Tuesday's session.

Clorox said its portfolio of brands, which includes Clorox, Glad, Brita, Armor All, Burt's Bees, STP and Kingsford, achieved its highest ever market share of 27.9%.

Volume in the fourth quarter grew 2%, led by gains in the company's cleaning and household segments.

Clorox did say that gross margins fell, as expected, in the quarter as commodity costs and inflationary pressures increased. This was partially offset by price increases on some products.

The company expects "substantially higher commodity cost increases and other inflationary pressures in fiscal 2012 than we saw in fiscal 2011," and plans to take "broad price increases across our global portfolio" to help mitigate those costs.

For 2012 Clorox forecast sales growth of 1% to 3%, to a range between $5.28 billion and $5.39 billion, in line with analyst expectations for full year revenue of $5.34 billion. Gross margin was forecast to be flat for the year, and earnings per share are expected to be in a range of $4 to $4.10, compared with analysts' call for 2012 EPS of $4.06.

On July 26, Clorox rejected a revised unsolicited takeover bid of $80 per share from billionaire investor Carl Icahn and announced that its board of directors unanimously concluded that it "substantially undervalues the company is not credible."

Clorox had previously rejected an earlier bid of $76.50 per share.

Icahn sent a second letter to Clorox CEO Donald Knauss on July 20 calling the board's concerns "misguided," and wrote that "for Don Knauss and the rest of the board to claim our proposal remains inadequate and at the same time tout your record for shareholders seems a bit absurd."

Icahn's original proposal was widely viewed as merely a way to put Clorox in play. Entities controlled by Icahn own roughly 9.4% of Clorox's outstanding common stock, making him the company's largest shareholder. He tapped consumer products makers Procter & Gamble ( PG), Unilever ( UN), Kimberly-Clark ( KMB) and Colgate-Palmolive ( CL) as possible "strategic buyers" that might offer "superior bids."

"We are in a unique position as your largest shareholder in that we are wearing two hats -- one as a shareholder and another as a buyer," Icahn wrote in his July 15 letter.

>>For upcoming earnings and estimates, see our Earnings Calendar.

-- Written by Miriam Marcus Reimer in New York.

>To contact the writer of this article, click here: Miriam Reimer.

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