Clorox Q4 Profit Beats View, While Revenues Miss; Backs 2014 Outlook

(RTTNews) - Consumer products company Clorox Co. (CLX) on Thursday reported a 5 percent increase in profit for the fourth quarter from last year, aided by cost savings and price increases that helped offset lower volumes. Earnings per share beat analysts' expectations, while revenues missed their estimates. Looking ahead to fiscal 2014, the company maintained its financial outlook.

Oakland, California-based Clorox operates in four segments - cleaning, lifestyle, household, and international.

Cleaning segment as well as International segment sales for the fourth quarter declined 1 percent each from the prior-year period. Meanwhile, both household and lifestyle segments reported 2 percent year-over-year increase in sales.

Clorox's fourth-quarter net earnings rose to $183 million or $1.37 per share from $174 million or $1.32 per share, in the year-ago quarter. On average, sixteen analysts polled by Thomson Reuters expected the company to report earnings of $1.34 per share for the quarter. Analysts' estimates typically exclude one-time items.

The latest quarter's results reflect the benefit of strong cost savings and price increases. These were partially offset by higher manufacturing and logistics costs, including the impact of inflationary pressures, and unfavorable foreign currency exchange rates.

Net sales for the quarter rose slightly to $1.55 billion from $1.54 billion in the year-ago period. Analysts had a consensus revenue estimate of $1.57 billion for the quarter.

The increase in sales reflect the benefit of price increases, favorable product mix and lower trade spending, largely offset by lower volume and unfavorable foreign currency exchange rates. Excluding the impact of foreign currency declines, sales grew about 1.5 percent.

Gross margin for the quarter expanded 130 basis points from the year-ago period to 44 percent. The increase in gross margin was driven primarily by the benefit of strong cost savings and price increases, partially offset by higher manufacturing and logistics costs.

Volume for the quarter declined 3 percent, driven mainly by declines in the company's home care, charcoal and international businesses.

For fiscal 2013, Clorox net earnings increased to $572 million or $4.30 per share from $541 million or $4.09 per share in the prior year. Net sales for the year increased 3 percent to $5.62 billion from $5.47 billion last year. Analysts expected the company to earn $4.29 per share for the year on revenues of $5.65 billion.

Looking ahead to fiscal 2014, Clorox affirmed its outlook for sales growth in a range of 2 percent to 4 percent, with the first half of the fiscal year at the lower end or potentially below that range. The company also maintained its outlook for full-year earnings per share from continuing operations in a range of $4.55 to $4.70.

Street expects the company to earn $4.62 per share for the year on revenues of $5.83 billion.

In Thursday's regular session, CLX is trading at $86.42, up $0.48 or 0.56 percent on a volume of 270,283 shares.