Earnings Preview: Clorox - Analyst Blog
August 02 2011 - 6:30AM
Zacks
Clorox Corporation
(CLX), one of the world's leading manufacturers of consumer
products, is scheduled to report its fourth-quarter 2011 financial
results before the opening bell on August 03, 2011. The current
Zacks Consensus Estimates for the quarter is earnings of $1.19 a
share. For the quarter under review, revenue is expected at
$1,469.0 million, according to the Zacks Consensus Estimate.
Third-Quarter 2011, a
synopsis
Clorox Corporation posted lower
third-quarter fiscal 2011 earnings of $1.03 per share compared with
$1.07 per share in the year-ago quarter. Reported quarter earnings
also failed to meet the Zacks Consensus Estimate of $1.04 per
share.
Clorox's net sales during the
quarter upped 1.3% year over year to $1,304 million from $1,287
million in the year-ago quarter. However, total revenue fell short
of the Zacks Consensus Estimate of $1,321 million.
Total volume in the quarter inched
up 1% as the company benefited from volume gains from Burt's Bees
natural personal care products, the Away From Home institutional
business and Home Care category. However, this was partially offset
by decline in volume in the Glad and Brita businesses.
Guidance for Fiscal
2011
Clorox anticipates annual earnings
of $3.85 to $3.95 per share on flat to 1% growth in sales for
fiscal 2011. Gross margin is expected to decrease in the range of
75 to 100 basis points.
Fourth-Quarter 2011 Zacks
Consensus
The analyst covered by Zacks
expects Clorox to post fourth-quarter 2011 earnings of $1.19 a
share, slightly lower than earnings of $1.22 delivered in the
prior-year quarter. The current Zacks Consensus Estimate ranges
between earnings of $1.15 and $1.24 a share.
Zacks Agreement &
Magnitude
Of the 16 analysts following the
stock, only one analyst revisited and upgraded its estimate, over
the last 30 days for the fourth quarter of fiscal 2011. However,
the current Zacks Consensus Estimate has remained constant. Over
the last 7 days, not a single analyst revisited their
estimates.
Mixed Earnings Surprise
History
With respect to earnings surprises,
Clorox has thrice topped the Zacks Consensus Estimate over the last
four quarters in the range of approximately negative 4.4% to
positive 9.7%. The average remained at approximately positive 2.0%.
This suggests that Clorox has beaten the Zacks Consensus Estimate
by an average of 2.0% in the trailing four quarters.
Our View
Clorox is one of the world's
leading manufacturers of consumer products. The company possesses a
strong portfolio of brands, including Clorox, Glad, Brita, Armor
All, Burt’s Bees, STP and Kingsford, thereby offering it a
competitive edge and bolstering its well-established position in
the market.
Moreover, Clorox has established
well-defined financial goals to measure its progress. These goals
include 3% to 5% annual sales growth before acquisitions, and 75 to
100 basis points of annual improvement in operating margin.
On the flip side, the company faces
intense competition from other well-established consumer product
companies, both in the U.S. and in international markets, such as
Colgate-Palmolive Co. (CL) and Procter
& Gamble Co. (PG). Most of the company's products
compete with other widely advertised brands within each product
category and 'private label' brands and 'generic' non-branded
products of grocery chains and wholesale cooperatives in certain
categories, which typically are sold at lower prices.
We are maintaining a long-term
'Neutral' recommendation on Clorox Corporation. Moreover, the
company has a Zacks #3 Rank, implying a short-term 'Hold' rating on
the stock.
COLGATE PALMOLI (CL): Free Stock Analysis Report
CLOROX CO (CLX): Free Stock Analysis Report
PROCTER & GAMBL (PG): Free Stock Analysis Report
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