FX.co ★ Kimberly-Clark Increases 2024 Outlook

The Kimberly-Clark Corporation has recently updated its 2024 projections, predicting its adjusted earnings per share will grow at a low-teens percentage rate, realizing an improvement on previous forecasts of high-single-digit growth. Simultarily, the company's adjusted operating profit is also expected to grow in low-teens percentage, exceeding earlier expectations of high-single-digit to low-double-digit growth.

However, the company foresees a 700 basis points negative influence on its reported operating profit and reported earnings per share owing to currency translation fluctuations. This surpasses the previously anticipated 400 basis point headwind.

In aspects of reported net sales for 2024, Kimberly-Clark projects a negative impact due to 400 basis points of currency translation and 120 basis points from divestitures. This exceeds its previous assumption of 300 basis points and 60 basis points, respectively. Organic net sales are expected to grow in the mid-single-digits category, contra the former forecast of low-to mid-single-digit growth.

The company's first quarter results showed a profit of $647 million, or $1.91 per share, a significant increase from $566 million, or $1.67 per share from the same period in the previous year. Adjusted earnings per share increased by 20 percent, leaping to $2.01, largely driven by a 14 percent raise in adjusted operating profit along with a lower net interest rate, reduced effective tax, and increased equity income. The company surpassed analysts' expectations who had predicted an earning of $1.63 per share.

For the quarterly revenue, however, the company experienced a slight decrease of 1.0%, falling to $5.15 billion from $5.20 billion in the previous year. The silver lining was that it was still ahead of the analysts' average estimate of $5.09 billion. The company attributes this to a steady organic sales growth of 6%, motivated by a 4% increase in price, a favourable product mix, and a 1% boost in volume.

As a result of these developments, shares of Kimberly-Clark rose by 4% in pre-market trade on Tuesday.