Kimberly-Clark revenue up 7%, OTIS raises 2021 outlook

Highlights

  • Kimberly-Clark Corporation’s (NYSE: KMB) net sales rose 7% YoY to US$5.0 billion.

  • Otis Worldwide Corp’s (NYSE: OTIS) net sales were US$3.6 billion, up 10.8% YoY. 

  • KMB lowers its annual revenue outlook, while OTIS raises guidance on strong Q3 results.

Personal care company Kimberly-Clark Corporation and elevator maker Otis Worldwide Corp announced strong third-quarter revenue growth before the opening bell on Monday. 

Here is a snapshot of their quarterly performance.

Kimberly-Clark Corporation (NYSE: KMB) 

The Texas-based Kimberly-Clark’s net sales were up 7% YoY to US$5.0 billion compared to US$4.7 billion in Q3 the previous year. In addition, its organic sales were up 4% in the quarter. 

Segment-wise

The Personal Care segment sales rose by 14% to US$2.7 billion, Consumer Tissue segment sales were US$1.5 billion, down 5%, K-C Professional (KCP) segment sales were US$0.8 billion, up 13%, and a balance of US$16 million came from corporate and other areas.

Its operating profit was US$657 million in Q3 2021 compared to US$666 million in Q3 2020. 

The net income was US$469 million, down 1% compared to the net income of US$472 million in the September quarter of 2020. However, the income per share diluted increased to US$1.39 against US$1.38 in the same period a year ago. The adjusted earnings per share were US$1.62.

The company’s full-year stock repurchases fell to approximately US$400 million, the lower end of the previous range of US$400 to US$450 million. 

Its total debt was US$8.9 billion as of September 30, 2021.

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Outlook for full-year 2021

The company expects a net sales increase between 1% and 2% against the prior forecast of between 1% and 4%. The adjusted operating profit is to decline by between 20% and 22% YoY, compared to the previous projection of 11% and 14%. The adjusted EPS to remain between US$6.05 and US$6.25 and capital spending to be in the range of US$1,000 and US$1,100 million, down from the prior outlook of US$1,100 and US$1,200 million.

The diluted net income per share is expected to be between US$5.15 and US$5.60 and adjusted earnings per share between US$6.05 and US$6.25. 

The revised outlook for full-year 2021 reflects significantly higher input costs or inflation. 

Kimberly Clark is based in Dallas, Texas. Its current market capitalization is US$44.8 billion, and its P/E ratio is 22.66. With a dividend yield of 3.43%, KIM’s annualized dividend is US$4.56.

It has operations in 34 countries, and its products are sold in some 175 countries. The stock closed at US$133.04 on Oct 22, 2021. 

Also Read: American Express (AXP) Q3 income up 70%, Honeywell (HON) sales up 9%

Q3 results: Otis Worldwide Corp (NYSE: OTIS), Kimberly-Clark Corporation Common Stock (NYSE: KMB).

Source – Pixabay

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Otis Worldwide Corp (NYSE: OTIS) 

The Connecticut-headquartered Otis’ net sales were US$3.6 billion, up 10.8% increase YoY. Its organic sales were up 8.1%. 


Segment-wise

The organic sales were up 18.1% in its New Equipment segment to US$1.68 billion, and Service sales were at US$1.94 billion, up 5.1%, while the new equipment orders increased by 3.8%.  

Its GAAP operating profit was US$542 million, an increase of US$88 million from the previous year. In addition, the GAAP operating profit margin grew 110 basis points to 15.0%.

GAAP earnings per share (EPS) diluted were US$0.77, an increase of 26.2%, compared to US$0.61 per share diluted in Q3 of 2020.

The cash from operations was US$355 million, and free cash flow was US$324 million as of September 30, 2021. The company repurchased US725 million worth of shares year-to-date. It also announced a cash tender offer to buy the remaining 49.98% interest in Zardoya Otis. 

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Outlook for full-year 2021

The company expects a net sales increase in the range of 11.8% and 12.3%, while organic sales would grow between 8.5% and 9.0%.

It expects Organic New Equipment sales to increase between 15.0% and 15.5%, and Organic Service sales by around 4.0%. OTIS anticipates the adjusted operating profit to be between US$2.18 billion and US$2.19 billion, up from US$260 million and US$270 million at actual currency, and adjusted EPS of around US$2.95. The free cash flow is to be in the range of US$1.5 billion and US$1.55 billion. 

The elevator and escalator manufacturing company has over 69,000 employees. It has a presence in more than 200 countries with around 2.1 million customers globally.

The stock closed at US$85.63 on Oct 22, 2021. 

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Bottomline

The KMB stock price fell 5% YTD, while the OTIS stock gained 23% YTD. On the other hand, the NYSE Composite Index increased by 18% YTD. Stock markets can be volatile sometimes. Hence, investors should weigh the companies carefully before investing in the stock market.

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