Kimberly-Clark Expected to Post Year-on-Year Growth in Quarterly Earnings

Kimberly-Clark (KMB) is expected by analysts to report year-over-year gains in third-quarter adjusted earnings per share, revenue and gross margin when the consumer-products company releases the results Monday morning.

Analysts expect the company, whose products include Kleenex tissues, Scott toilet paper and Huggies diapers, to post third-quarter adjusted earnings per share of $1.54, up from $1.51 in the prior-year period, according to the mean estimate of analysts polled by Capital IQ. The analysts’ mean estimate for revenue is $4.73 billion, up slightly from the prior-year period’s $4.72 billion. Gross margin is expected to edge up to 36.7%, according to analysts’ mean estimate, up from 35.7% a year earlier.

In a note to clients, RBC Capital Markets said it is looking for “management commentary around the state of the consumer and per capita dynamics in emerging markets [to] provide color [on] whether top-line trends are poised to accelerate from here.”

The firm noted rival Unilever (UL, UN) discussed weak consumer demand in Asia and Latin America this quarter.

RBC said it is also looking for Kimberly-Clark to provide perspective on competitive pressures. It noted the company has many competitors globally, with competition “most intense in China (which management suggested has had a significant impact on pricing), and increasingly so in Brazil” while competition at home in the US is also elevated.

The firm said it will be looking for what it called the “PG Effect,” referring to rival consumer-products company Procter & Gamble (PG).

“With P&G looking to focus more on its highest-return businesses, we believe the cost of business is going to increase for KMB,” RBC said.