Clorox Sells More Expensive Products, Earnings Jump

Clorox Co. (CLX), which makes its namesake bleach and Glad plastic bags, on Thursday reported a 24 percent jump in quarterly profit on sales of newer, more expensive products and price increases.

Clorox, whose shares gained as much as 3 percent, said profit rose to $185 million, or 86 cents per share, in the fourth quarter ended on June 30, from $149 million, or 68 cents per share, a year earlier.

Analysts on average were expecting earnings of 83 cents per share, according to Reuters Estimates.

"Overall fundamental trends look to be ahead of our expectations," said Credit Suisse First Boston analyst Lauren Lieberman, who rates Clorox at "outperform."

Sales rose 8 percent to $1.24 billion, an increase that Clorox said was its biggest in more than two years. Volume, a measure of sales growth that factors out currency and price fluctuations, climbed 6 percent.

For fiscal 2005, the Oakland, California-based company maintained its earnings forecast of $2.58 to $2.66 per share, adding that sales and volume would grow 3 percent to 5 percent.

Analysts expect full-year profit of $2.64 per share, excluding charges.

Clorox said earnings per share could be higher if it resumes a stock repurchase program. Its major shareholder, Henkel KgaA (search) , has said it may sell some or all of its stake in Clorox to fund the acquisition of Dial Corp (search).

Clorox is holding off repurchasing shares while it continues discussions with Henkel, the company said.

For the current first quarter, Clorox forecast earnings of 53 cents to 55 cents per share, including a 9-cent restructuring charge for its Glad business, on sales and volume growth of 3 percent to 5 percent.

For the second quarter, Clorox expects earnings of 48 cents to 52 cents per share, including a restructuring charge of 1 cent to 2 cents for Glad, with sales and volume growth of 3 percent to 5 percent.

Analysts on average expected earnings of 54 cents per share, excluding charges, for the first quarter and 55 cents for the second quarter.

Clorox said earnings in those quarters could suffer from spending for new products such as Glad ForceFlex trash bags, which stretch to prevent rips and punctures.

The company's guidance for the second quarter "could cause some concern" since it is below current Wall Street estimates, said Banc of America Securities analyst William Steele, who has a "buy" rating on Clorox.

But Clorox's backing of its full-year forecast would indicate it expects results in the latter half of the year to make up for any perceived "weakness" in the second quarter, Steele wrote in a research note.

Shares of Clorox were up 96 cents, or 1.9 percent, at $50.66 in New York Stock Exchange (search) trade after climbing to $51.16 earlier in the day.