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Kimberly-Clark Halts Its Operations in Venezuela

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Price movement

Kimberly-Clark (KMB) rose by 0.15% to close at $136.17 per share during the second week of July 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 0.15%, 3.1%, and 8.5%, respectively, as of July 15. KMB is trading 1.2% above its 20-day moving average, 4.3% above its 50-day moving average, and 8.3% above its 200-day moving average.

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Related ETFs and peers

The PowerShares DWA Consumer Staples Momentum Portfolio (PSL) invests 2.0% of its holdings in Kimberly-Clark. The ETF tracks an index of US consumer cyclical firms selected and weighted by price momentum. The YTD price movement of PSL was 3.9% on July 15.

The PowerShares High Yield Equity Dividend Achievers Portfolio ETF (PEY) invests 1.7% of its holdings in Kimberly-Clark. The ETF aims to track a yield-weighted index of US companies that have increased their annual dividend for at least ten consecutive years.

The market caps of Kimberly-Clark’s competitors are as follows:

  • The Procter & Gamble Company (PG): $231.3 billion
  • Edgewell Personal Care Company (EPC): $5.2 billion

Latest news on Kimberly-Clark

Kimberly-Clark has halted its Venezuela operations due to weak economic conditions due to the rise in consumer prices and the imbalance in the demand and supply of basic goods. The company has stopped most of its production lines due to the rise in inflation and non-availability of raw materials in Venezuela.

On July 11, 2016, Reuters reported, “Venezuela’s socialist government said on Monday it was taking over and re-activating a plant that US personal care products maker Kimberly-Clark Corp. has halted due to the nation’s economic crisis.”

Performance of KMB in 1Q16

Kimberly-Clark reported 1Q16 net sales of $4.5 billion, a fall of 4.3% compared to net sales of $4.7 billion in 1Q15. Sales of personal care, consumer tissue, and K-C professional segments fell by 4.4%, 5.0%, and 4.0%, respectively, in 1Q16 compared to 1Q15. The company’s cost of products sold as a percentage of net sales fell by 2.0%, and its operating profit rose by 7.5% in 1Q16 compared to the corresponding period last year.

Its net income and EPS (earnings per share) rose to $545.0 million and $1.50, respectively, in 1Q16 compared to $468.0 million and $1.27, respectively, in 1Q15. The company reported non-GAAP EPS of $1.53 in 1Q16, a rise of 7.7% compared to 1Q15.

KMB’s cash and cash equivalents rose by 2.6%, and its inventories fell by 0.37% in 1Q16 compared to 4Q15. Its current ratio rose to 0.96x in 1Q16 compared to 0.85x in 4Q15.

In the next part, we’ll take a look at Autoliv.

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