Kimberly-Clark Corp., the maker of Huggies diapers and Kleenex tissues, said Wednesday that its profit dropped 8 percent in the first quarter because of the effect of the stronger dollar. The results still met Wall Street's expectations.
The company, which also managed to narrowly beat analysts' sales forecast, reaffirmed its profit forecast for the year.
Kimberly-Clark earned $407 million, or 98 cents per share, which met the estimates of analysts surveyed by Thomson Reuters, who generally exclude one-time items. That compares with $441 million, or $1.04 per share, a year ago.
But the stronger dollar took a bite out of its profit, reducing earnings by approximately 30 cents per share. A higher pension expense also lowered results by about 8 cents per share.
"Business conditions in the first quarter proved to be somewhat more challenging than we predicted earlier this year, with significant headwinds from weak global economies and volatile currency fluctuations," Chairman and Chief Executive Thomas J. Falk said in a statement.
Sales at the Dallas-based consumer products maker fell 7 percent to $4.49 billion for the period ended March 31. That beat analysts' estimates for $4.48 billion.
Sales of personal care and consumer tissue products climbed in North America, but dropped in Europe. Part of this stems from the dollar's impact. As the dollar's value grows in comparison to other currencies, revenue from outside the U.S. shrinks when it is converted back into dollars.
Kimberly-Clark maintained its forecast for full-year profit of $4 to $4.20 per share. It expects revenue to drop 6 percent to 8 percent, which implies sales of $17.86 billion to $18.25 billion. The company reported 2008 sales of $19.42 billion.
Analysts expect earnings of $4.14 per share on sales of $18.43 billion.