Kimberly-Clark Posts a Loss, Gives Disappointing Outlook

By Chelsey Dulaney 

Kimberly-Clark Corp. swung to a loss in its fourth quarter and gave a disappointing outlook for 2015 as the consumer goods company struggles with currency volatility and increased competition in its diapers segment.

Kimberly-Clark said it expects to post per-share earnings of $5.60 a share to $5.80 a share for the year, below Wall Street expectations for $6 a share. The company forecast a negative impact from foreign currency of 8% to 9%.

The maker of Huggies diapers has struggled in recent quarters as parents have skewed to the high and low ends of the price spectrum. The trend has played into the hands of rival Procter & Gamble Co., whose premium Pampers and low-end Luvs are gaining share.

Kimberly-Clark is also facing new competition from P&G's adult incontinence products and Japan's Unicharm Corp., which is starting to sell pull-up diapers in Brazil. Both threaten Kimberly-Clark's leading positions in the segments.

Overall, Kimberly-Clark posted a loss of $83 million, or 22 cents a share, compared with a profit of $539 million, or $1.40 a share, a year earlier. The quarter included a $462 million charge related to the remeasurement of Venezeula's currency. Excluding the charge and other one-time items, per-share earnings rose to $1.43.

Sales fell 1.4% to $4.83 billion.

Analysts polled by Thomson Reuters had forecast per-share earnings of $1.37 a share on revenue of $4.91 billion.

Organic sales, which exclude foreign currency fluctuations and other adjustments, increased 3%, driven by a 7% gain in its international segment.

Sales at the personal-care segment--which includes Huggies and is the largest segment by revenue--fell 1% to $2.3 billion, weighed by currency rates. Sales in North America fell 2% in the segment, weighed by lower Pull-Ups training pants and Huggies diaper volumes.

Sales at the consumer-tissue segment--which includes Cottonelle and Kleenex--fell 3% to $1.6 billion.

Write to Chelsey Dulaney at [e-mail]

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