Clorox Surprises on Q4 Profits

Clorox Co posted a bigger-than-expected rise in quarterly profit on Thursday, as price increases, lower advertising spending and a decreased tax rate offset higher costs, and it stood by its forecast for the current fiscal year.

Clorox, known for its namesake bleach, was seeing slight improvements in its categories and said it continued gaining market share. While Clorox said some relief was in sight for commodity costs, it was feeling pressure from uncertainty in some international markets and the negative impact of the higher US dollar.

For the year, Clorox sales rose 5% to more than $5.4 billion. Volume increased 2%, but net income dipped less than 1% to $543 million.

“I’m very pleased with our strong finish to fiscal year 2012,” said Chairman and Chief Executive Officer Don Knauss. “Despite the continuing challenges of a tough global economy, we delivered strong fourth-quarter results, growing sales for the sixth consecutive quarter. We continued to see our categories recover, and our U.S. all-outlet market share reached a record-high.”

Analysts were encouraged by Clorox keeping its 2013 outlook, which now excludes a lift from real estate gains expected to come later than previously anticipated. However, they did not expect the forecast to lead to big gains in the share price.

Clorox trades at about 16.9 times earnings, while larger household products maker Procter & Gamble Co trades at 16.5 times profit. P&G is set to report its results on Aug. 3.

Clorox raised the US price of bleach 12% last August to counter rising material costs that have affected profits. Clorox, whose products include cleansers and charcoal, is more heavily exposed to volatile commodity prices than some larger peers. The commodities Clorox buys include resin, diesel, chlor-alkali and sodium hypochlorite.