Kimberly-Clark who makes Kleenex Brand tissues experienced a decline in net income for the fourth quarter of 2004.
On a continuing operations basis, with financial results presented to reflect the spin-off of Neenah Paper on November 30, 2004, earnings per share for the quarter rose to 92 cents from 88 cents in the prior year, a gain of approximately 5 percent. Sales advanced about 8 percent to $3.9 billion, establishing an all-time quarterly record. The increase was driven by higher sales volumes of the company’s health and hygiene brands, up about 5 percent, and currency benefits of 3 percent. Sales grew versus the prior year in each of the company’s business segments — Personal Care, Consumer Tissue and Business-to-Business — as well as in all major geographic regions.
The strong top-line growth, productivity gains and other cost savings, along with a reduction in the number of common shares outstanding, all contributed to the improvement in fourth quarter net income from continuing operations. These positive factors more than offset inflation, primarily in distribution, fiber, and oil-based costs, and a higher effective tax rate. The quarter’s results also reflect continued strong cash flow and improvement in return on invested capital (ROIC).
Cash provided by operations climbed 18 percent to $678 million in the fourth quarter of 2004. This brought the total for the year to $2.7 billion, an increase of 7 percent versus 2003 and a new record for the fourth consecutive year. Free cash flow (cash from operations less capital spending and dividends) was $1.4 billion in 2004, surpassing last year’s full-year record of $1.0 billion by a wide margin. The company boosted ROIC by 50 basis points in 2004, meeting its target to improve this key measure by 40 to 50 basis points annually.
Chairman and Chief Executive Officer Thomas J. Falk said, “I am encouraged by our continued progress in the fourth quarter, capping a year of delivering on our commitments in a challenging business environment. We achieved sales volume and earnings per share growth in line with our Global Business Plan objectives, generated outstanding cash flow and made great strides in our drive for long-term ROIC improvement. Our teams have done an excellent job executing the Plan, which has led to many positive changes at Kimberly-Clark. Today, we are squarely focused on our health and hygiene mission, prioritizing the best growth opportunities for our global brands and applying greater financial discipline to every area of the company.”
Murdok | Breaking eBusiness News
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