Use the FORCE, Kimberly-Clark

Consumer-products biggie Kimberly-Clark (NYSE:KMB) reported earnings for its third quarter yesterday. Let's see how the maker of diapers and paper products -- among other stuff -- performed over the past three months, after some struggles earlier in the year.

For the quarter ended Sept. 30, net sales increased 5% to $4.2 billion. Operating income went up 13% to $526.4 million, and net income advanced 12% to $364.2 million, or $0.79 per diluted share. Adjusting for charges related to a restructuring, net income becomes $455.2 million, or $0.99 per diluted share, compared with $451.7 million, or $0.95 per diluted share, in the year-ago quarter.

For the nine-month time frame, net sales increased roughly 5% to $12.4 billion. The story looks different on the income side, however. Operating income fell 14% to $1.5 billion, and net income was down 15% to $1 billion, or $2.21 per diluted share. Adjusting for the aforementioned charges, net income was $1.3 billion ($2.87 per diluted share) versus $1.4 billion ($2.83 per diluted share) in the comparable period.

Kimberly-Clark has been facing its share of troubles. As Foolish colleague Nathan Parmelee noted back in April, the company found that its cost of doing business was eroding its ability to create value. Indeed, when companies start throwing around funny acronyms -- such as FORCE, which stands for "Focused On Reducing Costs Everywhere" -- you know that they really need to get their act together. Inflationary pressures in the commodities markets take their toll on entities like Kimberly-Clark.

The company's share repurchases, however, are helping to alleviate pressures on earnings growth. What's more, the preliminary cash flow data shows a decent improvement in terms of cash from operations for the past nine months, which increased 8%. The company spent more on capital costs in the past nine months, so free cash flow was down about 5% at $1.1 billion. Dividends paid out over the year equaled approximately $660 million, so the free-cash generation is still covering that shareholder benefit quite ably.

Kimberly-Clark is a good long-term bet. It has a big portfolio of products that competes with items from Procter & Gamble (NYSE:PG) and Playtex Products (NYSE:PYX). I'm not so concerned with the short-term troubles that the company may have. Looking at its dividend history, for instance, I see a nice string of pay raises that shareholders have enjoyed. Back in 1997, the dividend was $0.24 per share per quarter. Today, the quarterly payment is equal to $0.49. And if you check out a really long-term chart of the company's stock, like one set to 20 years or so, you'll find that the past appreciation has been quite stellar.

But the past is past. Will the future be the same? I believe that Kimberly-Clark is a solid company coming off a challenging period and that it should grow over time. The stock sold off yesterday because it didn't meet Wall Street's targets -- but who cares? Short-term troubles are oftentimes just that -- short-term. Long-term debt is down, there is more cash on the balance sheet, and the stock is yielding about 3% in dividends at the moment. If the shares go lower, this might be one consumer-products giant worth taking a look at.

Check out some past Takes on Kimberly-Clark:

• Kimberly-Clark's Uphill Battle
• Kimberly-Clark Still in Limbo
• Find out why Kimberly-Clark was in the Foolish Spotlight back in the summer.

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Fool contributor Steven Mallas owns none of the companies mentioned. The Fool has a disclosure policy.