Kimberly-Clark Corporation (NYSE: KMB) reported a 49% jump in earnings for the third quarter of 2019 helped by a gain on the sale of a manufacturing facility as part of the restructuring. The bottom line exceeded analysts’ expectations while the top line came in line with consensus estimates.
Net income jumped by 49% to $671 million or $1.94 per share. Adjusted earnings increased by 8% to $1.84 per share. Net sales rose by 1% to $4.64 billion.
Changes in foreign currency exchange rates reduced sales by 2% and business exits in conjunction with the 2018 global restructuring program reduced sales slightly. Organic sales increased by 4%. Net selling prices rose 4% and product mix improved 1%, while volumes fell 1%.
Looking ahead into the full year 2019, the company now expects net sales to be down slightly year-over-year compared to the prior assumption of even to down 1%. Adjusted earnings guidance is lifted to the range of $6.75 to $6.90 per share from the prior range of $6.65 to $6.80 per share.
For the third quarter, sales of the Personal Care segment rose by 2% as net selling prices increased by 3%, volumes rose 1% and product mix improved 1% while changes in currency rates reduced sales by 3%. Sales of Consumer Tissue segment rose by 1% as the net selling prices increased 5% while volumes declined 2% and changes in currency rates reduced sales by 2%.
The K-C Professional segment sales declined by 1% as the changes in currency rates and business exits in conjunction with the 2018 global restructuring program each reduced sales by 2%. Net selling prices increased by more than 3% and product mix improved 1%, while volumes were down 2%.
In January 2018, Kimberly-Clark initiated the 2018 Global Restructuring Program for lowering its structural cost base. The company expects the program to generate annual pre-tax cost savings of $500 million to $550 million by the end of 2021. As part of the program, Kimberly-Clark expects to exit or divest some low-margin businesses that generate about 1% of company net sales.
To implement the program, the company expects to incur restructuring charges of $1.35 billion to $1.5 billion after-tax by the end of 2020. Through the third quarter of 2019, the company has incurred cumulative restructuring charges of $964 million after-tax and generated cumulative savings of $260 million.