Kimberly-Clark Leads Off with Good News for Consumer Staples Makers (KMB, PG, CL)

Kimberly-Clark Corp. (NYSE: KMB) posted earnings and revenues this morning that exceeded expectations, setting the stage for next week’s reports from Procter & Gamble Co. (NYSE: PG) and Colgate-Palmolive Co. (NYSE: CL). Kimberly-Clark posted EPS of $1.24, nicely higher than the consensus estimate of $1.17. Revenues came in at $5.24 billion compared with a consensus estimate of $5.05 billion.

The company was able to lower its costs and improve its sales in Asia enough to overcome lagging revenue in the US. The maker of Kleenex tissues and Huggies diapers plans to increase its marketing expenditures in an effort to increase purchases of some of its other products. Huggies sales are down in the US as families have fewer children or switch to lower cost brands.

Kimberly-Clark reiterated its full-year EPS guidance of $5.00-$5.15, not including restructuring costs, and expects revenues to be flat to up 1%. Proctor & Gamble, which reports earnings next Friday, is expected to post EPS of $0.93 on revenue of $20.3 billion. Colgate-Palmolive reports earnings next Thursday is expected to show EPS of $1.24 on revenue of $4.18 billion.

Of the three, Kimberly-Clark’s dividend yield is the highest, at 3.9%, while Dow component Procter & Gamble sports a dividend yield of 3.4% and Colgate-Palmolive’s yield is 2.5%. Colgate’s forward P/E ratio is nearly 17, while P&G’s is around 16 and Kimberly-Clark’s is about 14. All three are included in S&P’s list of 51 Dividend Aristocrats for 2012.

Kimberly-Clark’s shares are up about 2.2% today at $76.90 after posting a new 52-week high of $77.09 earlier this morning. The 52-week low is $61.00. P&G’s stock also got a boost this morning, to within $0.35 of its 52-week high of $67.95. Colgate came even closer, within two pennies of its 52-week high of $98.77.

Paul Ausick