Clorox 4th-qtr net income nearly flat as sales rise but it pays higher taxes

Clorox 4Q net income nearly flat on higher taxes

NEW YORK — Household products maker Clorox Co. said Tuesday that its fourth-quarter net income was nearly flat, even though its revenue rose 1 percent, because it paid higher taxes and had smaller margins than a year earlier.

Overall volume rose 2 percent, helped by record shipments of Hidden Valley Ranch salad dressings and Kingsford charcoal, and revenue rose to $1.52 billion from $1.5 billion.

The company earned $171 million, or $1.20 per share, in the three months that ended June 30. A year earlier, Clorox earned $170 million, or $1.20 per share.

The results met the average forecast of analysts surveyed by Thomson Reuters for $1.20 per share on revenue of nearly $1.51 billion.

Clorox still expects to earn $4.50 to $4.65 per share for fiscal 2011, in line with estimates. For the full year, its net income rose 12 percent and revenue rose 1.5 percent, and it expects sales to grow between 2 percent and 4 percent in 2011 — more likely at the lower end of the range.

But it expects volume to grow faster than revenue, meaning it will sell more products at lower prices.

Shares of Clorox, based in the Oakland, Calif., fell 23 cents to close at $64.47 on Tuesday.

Standard & Poor’s analyst Michael Souers said the results beat his estimate by 2 cents, mainly because of its significant cut in advertising costs. He maintained his “Hold” rating on the stock and $69 target share price.

The company said a currency devaluation in Venezuela cut its revenue 2.3 percentage points. Venezuela’s devaluation of its currency and move to a two-tier exchange structure for the Bolivar also has hurt other consumer products makers such as Colgate-Palmolive Co.

Clorox said both its higher spending on promotions and rising competition also cut into its revenue. Shoppers are still trading down to less expensive products to help manage their spending, and they’re shopping around for deals, leading Clorox and other consumer products to increase promotions in their fight for market share.

Revenue in the company’s largest division — household — was flat at $540 million. Volume rose 1 percent for the segment, where shipments of Glad food-storage products fell but shipments of charcoal and Glad trash bags rose.

Revenue in the cleaning unit fell 1 percent to $460 million, with lower shipments of Clorox disinfecting wipes and disinfecting products, compared with last year’s fourth quarter, when those sales rose because people were concerned about the H1N1 flu virus.

For the year, Clorox earned $603 million, or $4.24 a share, up from earnings of $537 million, or $3.79 per share, in fiscal 2009.

Its full-year revenue rose to $5.53 billion.