Kimberly-Clark sales up; interest expense hits net

Tue Apr 22, 2008 11:05pm BST
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By Brad Dorfman

CHICAGO (Reuters) - Kimberly-Clark Co (KMB.N: Quote, Profile, Research) posted a 10 percent rise in quarterly sales on Tuesday, helped by price increases and growth in emerging markets, but net income fell on higher interest expense from a stock repurchase.

Earnings before special items met the high end of the forecast from the company, which makes Kleenex tissues and Huggies diapers.

Kimberly-Clark, like most consumer products makers, has faced rising energy and raw material costs and a weakening U.S. economy. Its first-quarter commodity-related costs rose $160 million, and the company also increased marketing spending by $22 million.

The company has cut costs and raised prices to deal with commodity inflation. Net selling prices rose almost 2 percent in the quarter.

Net profit fell to $440.9 million, or $1.04 per share, from $452 million, or 98 cents a share, a year earlier, when there were more shares outstanding.

Excluding restructuring costs, earnings were $1.08 a share. The company had forecast $1.05 to $1.08, and analysts on average were expecting $1.07.

Sales rose 9.7 percent to $4.81 billion from $4.39 billion, beating the analysts' average forecast of $4.74 billion. More than four percentage points of the gain came from the weak dollar, which boosts the value of overseas sales when they are converted to the U.S. currency.

Sales of personal care products, which include diapers and baby wipes, climbed 13.8 percent in the first quarter, while volume rose 7 percent.  Continued...