Double-click any word to search
Highlight any phrase & click HotSearch
CHICAGO (AP) — Household products maker Clorox Co. said Wednesday that its second-quarter profit jumped 28 percent as it continued to get a boost from sales linked to the swine flu.
The company also increased its earnings outlook for the full year.
Clorox said both U.S. and international sales of its disinfecting products benefited from demand associated with the H1N1 flu pandemic for a third straight quarter. The spike in sales of its disinfectant wipes already is waning, however, tempering expectations for the rest of the fiscal year.
"Obviously this was a bit of a boom for us in the first half and will dissipate in the second half," Larry Peiros, chief operating officer of Clorox North America, said on a conference call.
Favorable foreign exchange rates also contributed to the company's strong quarter.
Net income for the last three months of 2009 was $110 million, or 77 cents per share, up from $86 million, or 61 cents a share, a year earlier.
The earnings were a penny better than the consensus estimate of analysts surveyed by Thomson Reuters.
Revenue climbed 5 percent to $1.28 billion from $1.22 billion.
Clorox, based in Oakland, Calif., is known for its namesake bleach, Kingsford charcoal and other household products. Its cleaning products had improved results in the first quarter, and analysts weren't sure whether that momentum continued in the second quarter as fears of the H1N1 virus faded.
Chief Executive Don Knauss said the company spent aggressively on advertising to ensure continued loyalty to its brands in a tough economic environment. That helped increase sales in three of its four product segments — all but household products — even though its prices were higher than competitors'.
"We increased the investment in our brands, with more advertising to build long-term brand equity and higher trade spending to impact short-term competitive price gaps at the shelf," he said in a statement.
In addition to the jump in cleaning products, lower commodity costs helped spur a 10 percent increase in sales from its lifestyle unit, which includes Brita water-filtration products, Hidden Valley salad dressing and Burt's Bees products.
Clorox raised its outlook for full-year earnings by 5 cents per share to a range of $4.10 to $4.25 per share. It previous forecast earning $4.05 to $4.20 per share.
"All in, a very solid quarter with decent outlook," Deutsche Bank analyst Bill Schmitz said in a note to investors.
For the first six months of its fiscal year, Clorox reported earnings of $267 million, or $1.88 per share, up from $214 million, or $1.51 per share, for the same period a year earlier. Revenue rose 2 percent to $2.65 billion from $2.6 billion.
Clorox shares rose 12 cents to $60.78 in afternoon trading.