Kimberly-Clark Q2 Profit Down 10 Percent On Higher Costs

July 24, 2008 6:46 p.m. EST

Dallas, TX (AHN) - Kimberly-Clark Corp. announced Thursday a 10 percent drop in second quarter profit as the company battles rising cost for oil, natural gas and softwood pulp.

The consumer staple company reported second quarter net income of $416.7 million or 99 cents a share, compared to $461.8 million or $1 a share in the period a year earlier.

Revenue was 11.2 percent higher to $5 billion from $4.5 billion a year ago.

Analysts were expecting profit of $1.03 a share on revenue of $4.98 billion, according to Thomson Financial.

The company said without one-time charges it earned $1.03 a share.

"The reality is that the rapid run-up in commodity costs has outpaced our ability to offset inflation in the near-term with price increases and other actions," CEO Thomas Falk told investors, according to Associated Press.

Kimberly-Clark has already raised prices for its Kleenex, Cottonelle bathroom tissue and Viva paper towel products twice this year.

The company stuck to its full year earnings forecast of $4.20 to $4.30 a share.

For the second quarter, sales for personal care products rose 15 percent, with volume increasing 9 percent. Sales for personal products in the U.S. rose 10 percent with volume increasing 8 percent.

Shares of Kimberly-Clark finished $1.34 lower on Thursday to $5.35.