Kimberly Clark (KMB): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


Kimberly-Clark missed on both earnings and revenues in the fourth quarter 2014. Earnings of $1.35 per share however grew 3.8% from the year-ago figure, boosted by organic sales growth, cost savings, decline in marketing, research and general expenses and lower share count owing to share buybacks. However, earnings were negatively impacted by unfavorable foreign currency exchange rate effects, input cost inflation, higher taxes and lower net income from equity companies. Meanwhile, organic sales grew 3% backed by higher sales volume and selling prices. Overall, we are encouraged by the company's regular innovations, growth initiatives and a strong international presence. Further, after the company's spin-off of its health care segment, it will be able to focus on its core consumer and professional brands. However, the company continues to expect higher input costs and currency trends to impact profitability and margins in the near term. We therefore prefer to remain on the sidelines with a Neutral recommendation.


Incorporated in Delaware in 1928, Kimberly-Clark Corporation (KMB) is principally engaged in the manufacture and marketing of a wide range of consumer products around the world. The company sells its products to supermarkets mass merchandisers drugstores warehouse clubs variety and department stores retail outlets manufacturing, lodging, office building, food service, and health care establishments and high volume public facilities.

Based on product grouping, the company conducts its operations in four business segments namely Personal Care, Consumer Tissue, K-C Professional & Other and Health Care.

The Personal Care segment includes products like disposable diapers, training and youth pants, and swim pants baby wipes feminine and incontinence care products under brands, such as Huggies, Pull-Ups, Little Swimmers, GoodNites, Kotex, Lightdays, Depend and Poise.

The Consumer Tissue segment includes bathroom tissue, paper towels, napkins and related products for household use under brands such as Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Hakle and Page.

The K-C Professional & Other segment consists of facial and bathroom tissue, paper towels, napkins, wipers and a range of safety products under Kimberly-Clark, Kleenex, Scott, WypAll, Kimtech, KleenGuard, Kimcare and Jackson brands.

The Health Care segment consists of disposable health care products, such as surgical drapes and gowns, sterilization wrap, face masks, exam gloves, digestive health and, respiratory products, pain management products and other disposable medical products under Kimberly-Clark, Ballard, ON-Q and other brand names.

On Oct 31, 2014, Kimberly-Clark completed the spin-off of its health care business, which became a separate publicly traded company called Halyard Health, Inc. (HYH) and began trading on the New York Stock Exchange from Nov 3. However, the company's financials and statements will include the health care business as the third quarter of 2014 extends through Oct 31.

The divested health care business will be presented as discontinued operations, which will exclude overhead costs previously allocated to health care that will remain part of Kimberly-Clark after the spin-off.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: KMB , HYH

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