Dial Beats Estimates for Second Quarter

Dial Corp. today beat analysts estimates with a sharp rise in second-quarter net income and raised its forecast for full-year earnings, a rare move for a consumer products company in the current weak economic environment. Helped by sales growth in its soap and laundry business, the maker of Dial soap, Renuzit air freshener and Armour canned meats continued its rebound from a dismal 2000 by posting net income of $14.7 million, or 16 cents a share, up from $1.1 million, or 1 cent a share, a year ago.

Earnings in the 2000 second quarter were 10 cents a share before restructuring charges and a one-time gain. That quarter also included a loss from a joint-venture the company has since ended. Analysts had expected the company to post earnings of 13 to 14 cents a share, with a consensus forecast of 14 cents, according to market research firm Thomson Financial/First Call.

Herbert M. Baum, The Dial Corporation chairman, president, and chief executive officer, said, “Top-line growth from our core businesses, coupled with an improvement in gross margin and the elimination of last year’s loss in the Dial/Henkel joint venture, led to the earnings gain in the second quarter. Better than expected performance in the first and second quarters of this year and the solid sales trend currently are expected to result in 2001 third quarter earnings per share of approximately $0.18 and full year 2001 earnings per share of $0.68 to $0.70 compared to the current estimates for the year of $0.61 to $0.65, as reported by First Call.”

Second quartert net sales rose 5% to $429.2 million. In the beginning of 2001 the Company lowered some of its trade allowances and list prices for certain personal cleansing and laundry care products. Commenting on business unit performance, Mr. Baum added, “Our personal cleansing and laundry care businesses had a particularly good second quarter. Personal cleansing reported sales grew 8.0% primarily due to the Coast acquisition and strong performance in the base business. Laundry care sales increased 9.3% over the year ago quarter primarily driven by continued strong performance of Purex Ultra liquid laundry detergent and the Zout stain remover acquisition. Second quarter sales for our air fresheners business were slightly higher primarily due to new product introductions, offset in part by some softness in the base business. Specialty personal care sales were down versus prior year mainly due to the discontinuation of both the Nature’s Accent product line and unprofitable SKUs in the base business, as well as overall softness in the category.”