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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: shades who wrote (60213)	5/3/2006 2:21:58 PM
From: shades	Read Replies (2) \| Respond to of 110194

Clorox 1Q Net Hit By Higher Commodity Costs (more ppi on the rise) By Michael Baron Clorox (CLX) reported fiscal third-quarter earnings Wednesday that dipped slightly from year-ago levels due to increased commodity costs and a higher tax rate. The company also said Jerry Johnston, its chairman and chief executive, would retire following his heart attack in early March. Recently, shares of Clorox were off 5%, or $3.22, at $61.20 on volume of 2.1 million compared to average daily volume of 902,000. The Oakland, Calif., consumer products giant, whose brands include its namesake bleach, Pine-Sol cleaner and Brita water-filtration systems, hired executive placement firm Spencer Stuart to conduct a search for Johnston's replacement. Robert Matschullat will continue to serve in both the chairman and CEO roles on an interim basis, as he has since March 7. For the March quarter, Clorox reported fiscal third-quarter earnings of $110 million, or 72 cents a share, down from a year-ago profit of $118 million, or 76 cents a share. The latest results include stock option expensing of 2 cents a share, while the year-ago results include earnings of $2 million, or a penny per share, from discontinued operations. Sales rose 7% in the latest three months to $1.16 billion from $1.09 billion in the same period a year earlier. The average estimate of analysts polled by Thomson First Call was for a profit of 71 cents a share in the March period on sales of $1.16 billion. Clorox said volume was flat for the quarter as increased shipments of home-care products, products in Latin America, and cat litter and Hidden Valley salad dressing were offset by lower shipments of auto-care products, laundry products and its Brita offerings. "Robust recent results look to be decelerating, with the high end of fiscal 2006 guidance lowered and 2007 below (analyst) expectations," said Deutsche Bank analyst Bill Schmitz in a note to clients. "Additionally, Jerry Johnston, who has been recovering from a heart attack, announced he would retire, which adds another layer of uncertainty." Clorox said it sees earnings from continuing operations of $1.00 to $1.06 a share for the fourth quarter, and $2.97 to $3.03 a share for the full year. This forecast includes stock option expensing of 4 cents a share and 14 cents a share in the respective periods. Wall Street's current consensus estimates are for earnings of $1.07 a share in the June quarter and $3.03 a share for fiscal 2006. Clorox said the fourth-quarter outlook reflects expectations for continued unfavorable weather in early-season warm-climate markets and its anticipation that commodity costs will remain significantly higher than year-ago levels. Sales growth is projected at 3% to 5% for the fourth quarter and 5% to 6% for fiscal 2006. The company also provided an initial outlook for fiscal 2007, saying it expects earnings of $3.20 to $3.30 a share, including stock option expensing of 5 cents a share, with sales growth at its long-term target of 3% to 5%. The current average estimate of analysts polled by First Call is for a profit of $3.36 a share in fiscal 2007. For the first quarter of fiscal 2007, Clorox sees earnings of 67 to 73 cents a share. "As expected, Clorox gave conservative fiscal 2007 earnings per share guidance but more conservative than we thought," said J.P. Morgan analyst John Faucher in a note to clients. "We think this estimate is based on a continued high and volatile raw material cost environment." -Michael Baron; 415-439-6456; AskNewswires@dowjones.com (END) Dow Jones Newswires May 03, 2006 12:41 ET (16:41 GMT) Copyright (c) 2006 Dow Jones & Company, Inc.- - 12 41 PM EDT 05-03-06