Kimberly-Clark achieves record cost savings in year-end results

Despite facing a challenging year, Kimberly-Clark Corporation achieved record cost savings, improved margins and delivered bottom-line earnings in line with its guidance for the year.
Kimberly-Clark CEO Thomas J. Falk. Photo courtesy
Kimberly-Clark CEO Thomas J. Falk. Photo courtesy

Despite facing a challenging economic and competitive environment in 2016, Kimberly-Clark Corporation has reported that its full-year 2016 results were consistent with the company’s previous outlook.

The company’s fourth quarter 2016 net sales of $4.5 billion were even with the prior year and its organic sales increased by 1 per cent, including a 3 per cent growth in developing and emerging markets. Changes in foreign currency exchange rates reduced sales by 1 per cent.

Diluted net income per share for the fourth quarter was $1.40 in 2016 and $0.91 in 2015. The company stated that the comparison benefited from cost savings and a charge in 2015 related to deconsolidating the company’s Venezuelan business at the end of 2015.

[quote]“While we experienced a challenging economic and competitive environment in 2016, our market share positions remained broadly healthy. We also achieved record cost savings, which helped us improve our margins and deliver bottom-line earnings in line with our guidance for the year,” said chairman and CEO Thomas J. Falk. [/quote]

[quote]“In addition, we generated strong cash flow and returned $2.1 billion to shareholders through dividends and share repurchases.” [/quote]

Kimberly-Clark’s full-year diluted net income per share was $5.99 in 2016 and $2.77 in 2015, and its fourth quarter adjusted earnings per share were $1.45 in 2016 and $1.42 in 2015.

Full-year adjusted earnings per share were $6.03 in 2016, up 5 percent compared to $5.76 in 2015. The company’s previous guidance for adjusted earnings per share was $5.95 to $6.05.

Full-year 2016 cash provided by operations was $3.2 billion, up 40 per cent year-on-year and net sales in 2017 are expected to be similar to 2016, including organic sales growth of approximately 2 per cent. Diluted net income per share for 2017 is anticipated to be $6.20 to $6.35.

The company’s Board of Directors has also approved a 5.4 per cent increase in the quarterly dividend, taking the dividend to 97 cents per share, up from 92 cents per share in 2016. This is the 45th consecutive annual increase in the company’s dividend. The dividend will be payable on 4 April 2017, to stockholders of record on 10 March 2017.

[quote]”Looking to 2017, we will execute our Global Business Plan strategies in what we expect will be a continued difficult environment,” added Falk. “Our teams will invest in innovation, marketing and targeted growth initiatives to keep our brands strong and help us compete effectively. [/quote]

[quote]“We will also continue to manage our company with financial discipline, with a focus on cost savings, cash flow and shareholder-friendly capital allocation. We remain optimistic about our opportunities to create long-term shareholder value.”[/quote]

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