Bloomberg News

Clorox Raises Quarterly Dividend to 71 Cents, Beating Estimates

May 14, 2013

Clorox Co. (CLX:US), the bleach maker with products ranging from Hidden Valley salad dressing to Glad trash bags, will raise its dividend by 11 percent, higher than analysts estimated.

The quarterly cash payout will be raised to 71 cents a share (CLX:US) from 64 cents, the Oakland, California-based company said in a statement yesterday. That compares with a Bloomberg dividend projection (CLX:US) of 69 cents.

While the maker of Burt’s Bees skin-care line and Brita water filters posted earlier this month reported third-quarter sales (RSTAMOM) and profit that missed estimates, it affirmed its forecast for full-year earnings of $4.25 to $4.35 a share. Sales at U.S. retailers unexpectedly advanced in April as lower fuel costs combined with rising stock and home values boost buying power, corroborating forecasts of economic growth.

Chief Executive Officer Don Knauss in a May 8 Bloomberg Radio interview predicted “continued margin (CLX:US) expansion” and earnings-per-share growth of 7 percent to 9 percent over the next 12 to 18 months. “It’s been a bit bumpy but we see steady improvement.”

Clorox rose (CLX:US) less than 1 percent to $86.22 at the close in New York yesterday. The stock has climbed (CLX:US) 18 percent this year, beating the 15 percent gain for the Standard & Poor’s 500 index.

The dividend will be distributed on Aug. 9 to stockholders of record as of July 24, Clorox said. The average of two analysts’ estimates compiled by Bloomberg was for a quarterly dividend of 69 cents.

Health Care

The company on May 1 trimmed its forecast for full-year sales to increase by 3 percent to 4 percent from an earlier estimate of as much as 5 percent growth, in part because of weakening foreign currencies and economic uncertainty in Argentina and Venezuela.

“We’ve readily embraced the fact that we’re a U.S.-centric company,” Knauss, a former Coca-Cola Co. (KO:US) executive, said in the May 8 interview. “International’s about 21 percent of our business (CLX:US). I think we’ll probably stay in that range over the next couple of years.”

Clorox seeks to expand in health-care products and services, such as selling bleach to hospitals, he said. “We were selling about $4 million or $5 million to hospitals five years ago. Today we’re selling $125 million. We think this could be a $300 million business in the next three to five years.”

The 100-year-old company, targeted last year by billionaire Carl Icahn, would consider acquisitions in the businesses of health-care products and services, Knauss said in a February interview.

To contact the reporter on this story: Ben Livesey in London at blivesey@bloomberg.net

To contact the editors responsible for this story: Stephanie Wong at swong139@bloomberg.net; Robin Ajello at rajello@bloomberg.net


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Companies Mentioned

  • CLX
    (Clorox Co/The)
    • $92.77 USD
    • -0.26
    • -0.28%
  • KO
    (Coca-Cola Co/The)
    • $41.97 USD
    • -0.29
    • -0.69%
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