4Q Profits Drop, Largely Due To Peso Problems
Jan. 19, 1995
DALLAS (AP) _ Kimberly-Clark Corp. reported a 9 percent fourth-quarter sales gain but a 25 percent drop in earnings, largely due to the effects of the Mexican peso devalution on the business of the diaper-and-tissue maker.
Kimberly-Clark earned $105.6 million, or 66 cents per share, after a $39.2 million accounting charge that reflected the peso devaluation, the company said Thursday. Last week, the company said it would take the charge for losses on the translation of liabilities in U.S. dollars into pesos.
During the fourth quarter of 1993, Kimberly-Clark's earned $141.6 million, or 88 cents per share. Wayne R. Sanders, chairman and chief executive officer, said that excluding the effects of the peso plunge, the company's performance met expectations.
Sales grew to $1.92 billion from $1.76 billion in the year-earlier quarter on higher volumes.
Operating profit was $208.4 million, down nearly 4 percent. The company blamed the dip mainly on lower U.S. selling prices for tissue products and higher fiber and marketing costs worldwide. Other factors included lower volumes for training pants in North America, continuing losses from European consumer products operations and higher overall research and general expenses.
The company said a 6 percent to 8 percent increase in the price of U.S. bathroom tissue, household towels and facial tissue are expected to take effect late in the current quarter.
However, Sanders cautioned that the first quarter of this year will be challenging because of the timing of price increases on U.S. tissue products, the cost of matching a competitor's price and count reductions on diapers and the ongoing impact of the weaker Mexican peso.
For all of 1994, the company's made $535.1 million in profits, or $3.33 per share, on sales of $7.36 billion. Earnings in 1993 were $510.9 million, or $3.18 per share, on sales of $6.97 billion.
Products made by Kimberly-Clark include Huggies diapers and Huggies Pull-Ups training pants, Kleenex facial tissue and bathroom tissue, and Kotex and New Freedom feminine care products.
Kimberley-Clark shares fell 87.5 cents to close at $47.87 1/2 on the New York Stock Exchange.