Strong international growth and price increases helped Kimberly-Clark produce a 3% fourth quarter sales increase and cap off a record year.
The company said fourth quarter sales increased 5% to $5.3 billion and full years sales increased 5% to $21.1 billion, excluding the impact of foreign exchange rates. Earnings per share fell to 68 cents from $1.01, but on an adjusted basis to excluded charges related restructuring activities, earnings increased to $1.37 from $1.28. Full year adjusted earnings increased to $4.42 from $3.99.
"Our fourth quarter results capped off a year of excellent performance for Kimberly-Clark," said chairman and CEO Thomas Falk. "For the full year of 2012, we delivered organic sales growth of 5%, highlighted by 10% growth in K-C International. We launched a number of product innovations and increased strategic marketing spending by $115 million and research and development spending at a double-digit rate."
The company also managed to increase its gross margins by 230 basis points and improve its operating margin rate by 90 basis points thanks to $335 million of cost savings. Cash provided by operations in the fourth quarter hit an all time high of slightly more than $1.1 billion and for the full year was nearly $3.3 billion.
For the coming year, the company expects profits to range from $5.50 to $5.65.
"The strength of our results this past year gives us added confidence that we will continue to execute our global business plan well going forward," Falk said. "In 2013, we will continue to pursue targeted growth initiatives, launch product innovations and support our brands with increased strategic marketing spending. We expect to achieve healthy levels of cost savings, which should help us overcome moderate commodity cost inflation."
Personal care was the company’s strongest performing segment with fourth quarter sales up 8% to $2.4 billion thanks to increase volumes and higher prices. Meanwhile, sales in the consumer tissue segment declined 2% to $1.7 billion.