Kimberly-Clark expected to post higher 1Q earnings, but down economy expected to sour sales

Earnings Preview: Kimberly-Clark

NEW YORK — Kimberly-Clark Corp., the maker of consumer products including Kleenex tissues and Huggies diapers, reports its second-quarter results before the market opens Friday.

WHAT TO WATCH FOR: Major consumer products makers are tweaking their businesses to deal with the weak retail environment and woo shoppers who are trying to spend less money.

Analysts will look for the company’s level of promotions: While they may be useful to keep people spending money on their brands, promotions can also eat into profits. Investors will want to see if the company can balance that.

Costs have been an issue for the maker of consumer tissues and powerhouse brands like Kleenex. Rising costs should be a major headwind in the quarter, UBS analyst Gail S. Glazerman told clients in a recent note.

WHY IT MATTERS: Kimberly-Clark sells its products around the world to people of all income levels, so the company’s sales are a good barometer of how people feel about spending money.

WHAT’S EXPECTED: Analysts polled by Thomson Reuters expect Kimberly-Clark to earn $1.14 per share on revenue of $4.95 billion in the second quarter.

LAST YEAR’S QUARTER: Kimberly-Clark reported profit of $403 million, or 97 cents per share on revenue of $4.72 billion a year earlier.