Kimberly-Clark Pleases on Earnings, Consumer Products Remain Favorable

Kimberly-Clark Corp. (NYSE: KMB) managed to beat earnings expectations with $1.30 per share versus estimates of $1.28 per share. Revenues were only up 0.2% year-over-year to $5.27 billion. We had estimates at $5.26 billion.

What is interesting here is that the consumer products giant has managed to boost its 2012 outlook at a time where many multinational corporations are lowering estimates due to currency woes on top of that pesky Europe-led global slowing news. The company now sees earnings coming in at $5.05 to $5.20 per share. Some may consider this “raised guidance” as being a bit of a catching up forecast because the consensus estimate is already $5.16 in earnings per share. The company’s prior guidance for 2012 had been $5.00 to $5.15 per share.

What is perhaps more important is that revenues are projected to be flat to up 1% for 2012. That translates to close to $20.8 billion to $21.1 billion, and that is lower than the consensus of almost $21.2 billion.

The report has Kimberly-Clark trading up 1% at $84.16 right at the open, after closing at $83.40 on Wednesday. The 52-week trading range is $61.00 to $86.25 and the dividend is now 3.5%. We have maintained that a dividend bubble has been forming here because the dividend now matches that of the much larger rival of Procter & Gamble (NYSE: PG).

Another rival earnings report came out from Colgate-Palmolive Co. (NYSE: CL), which is seeing a 2.5% gain in shares after the smaller company reported in-line revenue and earnings, and after reaffirming double-digit 2012 earnings growth.

JON C. OGG