In May, Clorox
The big story remains higher energy costs affecting raw material and transportation expenses. In the latest period the cost of sales as a percentage of net revenues increased 1.4 percentage points to 57.8% over the same period last year. Compare this with competitor P&G, whose costs of products sold as a percentage of revenue remained flat at 48.4% in the most recent quarter, and it's evident that Clorox has a way to go to get to that kind of operating efficiency.
Clorox also trailed P&G on the top line with growth of 5.3% versus P&G's 8%. Without question it's the international market revenues that continue to drive growth for Clorox, with an increase of 21% in this quarter of the same period last year. Increased shipments to Latin America were highlighted as one of the reasons for the strength.
On a GAAP (generally accepted accounting principles) basis, Clorox's earnings from continuing operations declined slightly to $108 million, a 0.9% decline from the year-ago period. However, because of a 2005 share-exchange program, Clorox's significantly lower outstanding share count resulted in a 24.6% increase in earnings per diluted share to $0.71.
Clorox manufactures well-known and widely used products, including KC Masterpiece, Kingsford coals, and its bevy of bleaches and cleaners. It's a solid company. And this is why it can be a nice anchor in an investor's portfolio. Nevertheless, when I'm comparing anchors, it's hard not to notice the impressive scale and performance of consumer goods giant P&G.
Procter & Gamble edges Clorox in top-line growth, with organic growth excluding acquisitions also at 8%. In addition, Procter & Gamble gets a nod for its better profit margins -- 13.7% compared with Clorox's 9.9%. Its profitability is one of the reasons that P&G's long-term debt has remained at roughly three times its cash & equivalents, as opposed to Clorox' long-term debt of more than 7.5 times cash on hand.
Clorox is certainly no chump. But for this Fool, the champ is P&G.
The Motley Fool has the goods on other consumer product manufacturers:
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Fool contributor Jeremy MacNealy does not own shares of any companies mentioned.