Clorox Revenue Slips, Outlook Cut, Shares Fall

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Clorox

OAKLAND (AP) – Clorox Corp., maker of Hidden Valley Ranch salad dressing, cleaning products and Kingsford charcoal, said its first-quarter net income jumped 37.6 percent on a gain from the sale of its auto-care business. But revenue slipped because shoppers are still shying away from purchases.

The Oakland-based company cut its outlook below estimates on the uncertain economy and the impact of its auto care sale. Shares fell sharply.

Clorox on Tuesday reported net income of $216 million, or $1.52 per share, in the three months ending Sept. 30. That compares with $157 million, or $1.11 per share, in the same period last year.

Excluding gains related to the auto-care sale, Clorox earned 98 cents per share. Revenue slipped 2.8 percent to $1.27 billion.

Analysts expected earnings of $1.14 per share on revenue of $1.38 billion.

Shares fell $3.10, or 4.7 percent, to $63.21 in early trading Tuesday.

The company said it sold 2 percent less product in the quarter, primarily on lower shipments of its Glad food-storage containers and Scoop Away cat litter. Clorox also said last year’s first quarter included more shipments of disinfecting products because of the swine-flu scare.

CEO Don Knauss said softness has continued into the first weeks of its second quarter. He said Clorox is managing its prices to compete with its rivals. Shoppers are limiting their purchases in the uncertain economy, and consumer products makers such as Clorox are cutting prices to attract them, but trying to balance that against the need to maintain profitability.

The company sold 9 percent less of its household products, including bags, wraps, cat litter and charcoal. But volume rose 1 percent each in its units that include salad dressings and water filtration systems such as Brita, and laundry and home care.
Clorox now expects sales to be flat or grow as much as 2 percent this fiscal year, down from its prior guidance for growth of between 2 percent and 4 percent. In the prior fiscal year the company’s revenue was $5.53 billion.

It cut its expectations for earnings per share on the impact of the auto care sale and now expects a range of $4.20 to $4.35, down from prior guidance of $4.50 to $4.65.

The company said in September it was selling the division that makes car-care brands such as Armor All and STP to private equity firm Avista Capital Partners for $780 million in cash. The unit made up about 5 percent of company revenue. Clorox is trying to focus on its primary businesses.

(© 2010 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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