Clorox Co. said Wednesday that annual profit will be less than already reduced forecasts because of higher energy costs and declining sales of Glad bags, STP fuel additives and other products, including its namesake bleach.
Fiscal 2001 profit will fall to $1.60 to $1.63 a share in the year ending June 30, from $1.75 a year earlier, Clorox said. The company was forecast to earn $1.72, the average estimate of analysts surveyed by First Call/Thomson Financial. Clorox had profit from operations of $420 million last year.
Oakland-based Clorox, which cut forecasts three months ago, said sales will fall unexpectedly this year because of slumping Glad and STP lines, acquired in its $2-billion purchase of First Brands Corp.
Rising costs, higher advertising spending and sluggish sales will hurt results in the first half of fiscal 2002 as well, Clorox officials said, without giving any estimates.
Clorox shares rose $1.54 to close at $33.03 on the New York Stock Exchange. They have fallen 35% since reaching a 52-week high of $48.63 on Nov. 22. The shares fell $1.79, or 5%, on Friday after Deutsche Banc Alex. Brown analyst Andrew Shore said Clorox might miss earnings forecasts.
Chief Executive Craig Sullivan said he "absolutely" would consider the sale of large businesses as well as smaller lines.
Accounting rules prevented Clorox from selling any of its 100 product lines for two years after it bought First Brands in January 1999. Clorox began a review after that barrier ended.
Some of Clorox's older lines have been hurt by competition from cheaper brands. Clorox will spend more on advertising and will lower prices on its Formula 409 cleaner and other lines, Sullivan said. The company has reduced bleach prices in Colombia and also is reviewing prices of Glad bags.
Fiscal third-quarter earnings will be in line with analysts' forecasts of 44 cents a share, helped by a decline in the company's tax rate, Clorox said. The company had profit from operations of $114 million, or 48 cents, in the year-earlier period.
Sales in the quarter ending March 31 and the year will fall slightly, Clorox said.