MORE PROOF OF RISING COSTS BEING PASSED ON AND HURTING PROFITS

Kimberly-Clark quarterly profit falls
Mon Oct 24, 2005 8:08 AM ET

NEW YORK (Reuters) - Kimberly-Clark Corp. on Monday posted lower third-quarter profit due to restructuring costs, but sales rose, aided by price increases on items such as Huggies diapers.

Net income fell to $325.3 million, or 68 cents per share, from $441.3 million, or 89 cents a share, a year earlier. Profit before unusual items was $451.7 million, or 95 cents per share.

Analysts, on average, expected Kimberly-Clark, whose products also include Kleenex tissues, to earn 95 cents per share, according to Reuters Estimates. That view was in line with a forecast the Dallas-based company gave in July, when it called for a profit of 94 cents to 96 cents a share.

Sales rose 6 percent to $4 billion.

In July, Kimberly-Clark announced plans to cut about 10 percent of its work force and close or sell 20 plants as it works on improving its diaper and health-care businesses and expanding in emerging markets. Its largest rival, Procter & Gamble Co. , recently bought Gillette Co. to add new products to its lineup and give it better leverage in developing regions.

Shares of Kimberly-Clark fell 5.4 percent during the quarter. The six-company S&P Household & Personal Products Index <.GSPHHPE>, which includes Kimberly-Clark, rose 6.8 percent in that time, driven by expectations for P&G's acquisition of Gillette. That deal closed on October 1, just after the quarter came to an end.