Clorox Profit Falls on Sluggish Sales
Clorox Co. said Wednesday that its fiscal second-quarter profit fell 7.5% because it sold fewer Glad bags, Brita water filters and other products.
Profit from operations fell to $74 million, or 31 cents a share, from $80 million, or 33 cents a share, a year earlier, said Clorox, the biggest U.S maker of household bleach. Sales in the quarter ended Dec. 31 fell 5.8% to $899 million from $954 million.
Sales of water filters fell 25% as a slowing U.S. economy hurt demand and prompted retailers to cut inventories, Clorox officials said. Sales of plastic bags and wraps fell 8% when some people switched to cheaper brands, while STP and other auto products fell 11% as higher gasoline prices prompted drivers to cut purchases of fuel additives, they said.
“Consumers are tightening their belts,” said Franklin Morton, director of research for Ariel Capital Management. “Growth in sales in a lot of the household-product categories has slowed.”
Oakland-based Clorox said last month that profit would fall for the first time in more than a year and earnings for fiscal 2001 ending June 30 won’t increase. The company had been expected to earn 38 cents before lowering forecasts last month.
The results were a penny more than the 30-cent average estimate of analysts surveyed by First Call/ Thomson Financial.
Clorox shares, which have fallen 31% in the last 12 months, rose 60 cents to close at $33.75 on the New York Stock Exchange.
Clorox Chief Executive G. Craig Sullivan said sales also were hurt by marketing mishaps after the $2-billion purchase of First Brands Corp., whose lines included Glad and STP. The purchase was the largest in Clorox’s 88-year history.
Sales of Fresh Step cat litter were depressed by an October recall of mouse toys in litter bags that reportedly killed two cats.
Focus on the merger may have contributed to approval of the toy, he said.
At a Glance
Other California company earnings, excluding one-time gains and charges unless noted:
* Irvine-based Allergan Inc., a maker of contact lens cleaners, eye medicines and other drugs, reported higher fourth-quarter profits, helped by growing sales of an anti-wrinkle agent, but said results this quarter will fall short of expectations as spending rises.
Net earnings rose 10% to $65.1 million, or 48 cents a diluted share, from $59.3 million, or 40 cents a share, a year earlier. Analysts expected 47 cents a share. Sales increased 5.4% to $400.7 million and the company projected first-quarter 2001 sales of $390 million to $405 million.
Earnings per share for the current quarter were estimated at 35 cents, below the current First Call projection of 39 cents. Allergan cited “strategic investments” for the anticipated launch of Lumigan, a new glaucoma treatment, for the early weakness and said earnings growth would pick up later in the year.
* Dole Food Co., the world’s biggest seller of fresh fruit, said it had a fourth-quarter loss because of the euro’s and yen’s drop against the dollar, higher fuel costs and tough pricing for bananas.
Dole’s loss from continuing operations was $7.4 million, or 13 cents a share, compared with year-earlier net income of $2.1 million, or 4 cents, the company said. Revenue fell 1.7% to $1.06 billion from $1.08 billion.
The 6.3% decline in the euro last year and the yen’s drop reduced the revenue Dole received when sales of bananas and other fruits sold in those countries were converted into dollars. Meanwhile, a trade dispute in Europe and increased shipping from smaller rivals has lowered banana prices.
The Westlake Village-based company said it expects results to improve this year because of cost cutting and a possible increase in the value of the euro against the dollar. Still, first-quarter earnings likely will be little changed from the year-earlier’s $36 million, or 65 cents a share, the company said.
* Superior Industries International Inc., a Van Nuys-based supplier of aluminum automotive parts for the auto industry, reported record fourth-quarter net income of $22.4 million, or 85 cents per share, compared with $21.6 million, or 81 cents, a year ago. Sales rose 14% to a record $168.9 million.
