Kimberly-Clark Corp.'s (KMB) first-quarter earnings rose 34% as the consumer-products company's cost-cutting measures and stronger-than-expected sales growth helped to improve margins.
Kimberly-Clark--whose products include Huggies diapers, Scott paper towels and Kleenex tissues--continues to battle tepid demand for its products, particularly in developed markets where a slow economic recovery contributes to a more cost-cautious-consumer environment. The company has forecast some relief from the high commodity prices seen last year, but it is finding it hard for some price increases to stick, especially in its diaper business, which is being pressured by a low birth rate. The company previously said it would increase its strategic marketing and last month it expanded Chief Marketing Officer Tony Palmer's role by naming him the new president of global brands and innovation.
Kimberly-Clark reported a profit of $468 million, or $1.18 a share, up from $350 million, or 86 cents, a year earlier. Excluding items such as restructuring costs, earnings rose to $1.24 from $1.09. Sales jumped 4.2% to $5.24 billion.
Analysts polled by Thomson Reuters had most recently forecast earnings of $1.17 on revenue of $5.05 billion.
Gross margin rose to 32.5% from 29.1% as input costs eased 0.8%.
Sales at the personal-care segment, the largest by revenue, rose 8.2% and consumer-tissue segment sales were down 0.9%. The smaller K-C Professional and health-care businesses saw sales increase 3.8% and 4.4%, respectively.
The company also backed its full-year earnings guidance.
Shares closed Thursday at $75.27 and were inactive premarket. The stock has gained roughly 2% over the past three months.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; email@example.com