Clorox is latest to feel sting from Venezuela
OAKLAND, Calif. (AP) — Clorox was able to offset some of the volatility in Venezuela that other consumer product companies are seeing with cost cuts and price increases, which turned into a bump of 3 percent to third-quarter profit.
However, that was still short of Wall Street expectations and shares slipped 2 percent in midday trading.
Consumer product companies have been trying to balance slow growth in developed markets by expanding their footprint in emerging markets like Latin America and Asia. That has driven growth, but it has also exposed them to some risks.
Venezuela devalued its currency and that led to a negative impact of $17 million in the international division for the quarter at Clorox. The company, which also makes Glad trash bags and other consumer products, lowered its outlook for the year, and cited the devaluation.
Last week Colgate-Palmolive Co., another consumer products company, blamed the devaluation as it reported a 16 percent decline in quarterly earnings.
Clorox on Thursday reported that net income for the three months ended March 31 rose to $137 million, or $1.04 per share. That compares with $133 million, or $1 per share, a year ago.
Excluding one-time items net income was $1.05 per share, or about 2 cents shy of analyst projections, according to a poll by FactSet.
Revenue fell nearly 2 percent to $1.39 billion, from $1.41 billion last year. Analysts expected revenue of $1.43 billion.
The Oakland company now expects net income of $4.25 to $4.35 in 2014, down from a prior range of $4.40 to $4.55 per share. Analysts had been projecting annual per-share earnings of $4.44.
The company expects revenue to fall slightly. It had previously forecast an increase in revenue of between 1 percent and 2 percent.
For fiscal 2015, the company expects $4.35 to $4.50 per share on flat sales. Analysts are looking for $4.74 per share.
The stock fell $1.80, or 2 percent, to $88.90 in midday trading. The stock is down about 2 percent so far this year.