Clorox Expects Lower Profits

Household products maker Clorox Co. said it expects lower fiscal third-quarter and full-year earnings, due in part to weaker volumes in its dressings and sauces and auto care businesses and higher energy and raw material costs, according to Reuters report. Clorox said it expects full-year earnings, before unusual items, of $1.60 to $1.63 per share, down from $1.75 a year ago. Analysts’ consensus estimate is $1.72, according to First Call/Thomson Financial.

For the third quarter, ending March 31, it expects earnings, before unusual items, of 44 cents per share, down from 48 cents a year ago but in line with Wall Street forecasts.

The revised projections reflect weaker volumes for several businesses, including dressings and sauces and auto care, the plastic bags and wraps business in the United States, and the bleach business in several Latin America countries, where Clorox is experiencing more competition from lower-priced competitors. The estimates also reflect higher energy and raw material costs. The company said it plans to lower prices on several of its brands to strengthen its competitive position.

“Since mid-December, we’ve heightened our focus on building positive top-line momentum. The marketing and other programs we began implementing earlier this quarter are starting to show some promising results; but it’s clear that achieving stronger volume and market share growth is going to take some time,” said G. Craig Sullivan, chairman and chief executive officer. “We are continuing to spend behind our businesses, and our investment in marketing support during the second half of the fiscal year will be considerably higher than year ago levels. We have also recently announced plans to roll back prices on several brands to strengthen their competitive positions.”