DOW JONES NEWSWIRES
Clorox Co.'s (CLX) fiscal third-quarter profit jumped 53% on
price increases and lower costs, though sales volume declined.
Shares rose 2.2% to $57.26 as earnings handily topped analysts'
expectations.
The company also raised its 2009 profit estimate to $3.70 to
$3.80 a share from its August forecast of $3.60 to $3.75 a share,
but cut the high end of its revenue-growth target to reflect higher
currency losses.
Consumer-products makers like Clorox have been roiled by
volatile commodities prices for the past few years. Chief Executive
Don Knauss said at a conference in February that Clorox had
succeeded in imposing additional price increases, despite pressure
during the recession for retailers and consumers to cut costs.
Some analysts say that makers of household goods such as paper
towels and detergent may see improved margins short term from lower
commodities costs, but that heavily commoditized products where
private-label offerings have made strong inroads aren't expected to
hold onto the benefit over the longer term.
For the quarter ended March 31, the company known for its
namesake bleach and other household goods reported earnings of $153
million, or $1.08 a share, up from $100 million, or 71 cents a
share, a year earlier. The periods had restructurigng charges of 9
cents a share and 13 cents a share, respectively.
Revenue was flat at $1.35 billion. Excluding the effects of a
stronger dollar and Clorox's exit from the food-bags business, it
would have risen 4%.
Analysts polled by Thomson Reuters were looking for earnings of
90 cents a share on revenue of $1.37 billion.
Gross margin rose to 45.3% from 39.8% on the price hike and cost
declines, resulting in Clorox's first margin increase in seven
quarters.
Volume fell 3%, primarily on price increases and the exit from
the food-bag business. North American sales were flat as volume
fell 4%, though earnings rose 24% on cost cutting. International
sales fell 1% on the stronger dollar while volume increased 2%,
mostly on shipments of laundry and home-care products to Latin
America. Earnings rose 28% amid cost cutting.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com
