Will Kimberly-Clark Shine in Its Fourth-Quarter Report?

After an incredible run in 2013 in which it rallied 23.7%, Kimberly Clark (KMB 1.34%) now has its sights set on impressing investors with its fourth-quarter report. The earnings are due out before the market opens on Jan. 24., and a beat could support a continued run higher. Let's take a look at the most recent earnings for the company and what analysts expect in the upcoming report, and determine if we should buy Kimberly Clark now or if we should wait to see what the company has to say.

The consumer goods giant                                                                                                     Kimberly Clark is one of the largest personal-products companies in the world. Its brands include Kleenex, Cottonelle, Depend, Huggies, Kotex, Scott, and numerous others, which are said to serve over a billion people each day. Kimberly Clark employs about 57,000 people in 61 countries and its products are currently available in more than 175 countries.

Most recent report                                                                                                                      On Oct. 22, Kimberly Clark reported third-quarter results that exceeded analyst estimates on both the top and bottom lines. Here's an overview of the results:

Adjusted earnings per share increased 7.5% and revenue rose 0.3% year-over-year, driven by organic sales growth of 5%. Gross profit increased 2.2% to $1.81 billion as the gross margin expanded 64 basis points to 34.3%. Revenue has been consistent over the last several quarters, around $5.3 billion, but Kimberly Clark has been repurchasing its shares in order to continue driving its earnings per share higher. In the third quarter, it repurchased about 1.6 million shares for roughly $150 million, while paying an $0.81 dividend; this quarterly dividend is up 9.5% from the $0.74 paid in 2012. Overall, I believe this was a great quarter and the momentum carried over into the final three months of the fiscal year.

Expectations & what to watch for                                                                                              Fourth-quarter results are due out before the market opens on Jan. 24. Here's an overview of the current expectations:

These estimates call for earnings per share to increase 3.7% and revenue to remain flat from the same period a year ago. This is expected to be yet another quarter with $5.3 billion in revenue, which would result in the sixth consecutive quarter around this approximate amount; this is the definition of consistency. Other than the key metrics, it will be important to watch for an update on share repurchases and whether the company met its goal of buying back $1.2 billion worth of common stock during fiscal 2013. Also, watch for a dividend raise, as Kimberly Clark has a reputation for increasing its dividend in the first quarter; I expect an increase of about 8.6%-11.1%, resulting in a quarterly payment of $0.88-$0.90.

Competitor showing fight                                                                                                           Kimberly Clark's largest competitor, Procter & Gamble (PG 0.52%), is also scheduled to report earnings on Jan. 24 before the market opens. Procter & Gamble is the company behind global brands like Tide, Pampers, Charmin, Duracell, Gillette, and Crest. Here are the current earnings estimates and the results from the year ago period:

These expectations call for earnings to decline 0.8% and revenue to grow 0.9%, which would not result in a very impressive quarter. Procter & Gamble is still restructuring, so it will be crucial to look for updates on the transition and how the process is going. Most importantly, I believe the company needs to name the successor to A.G. Lafley, who returned as CEO to get the company back on the path of growth; I do not think Lafley will remain as the head of P&G in 2015, so it is time to fill investors in on who will take over after he finishes the restructuring plan. As for the stock, I would wait for P&G to report before considering an investment in it due to the uncertainty. 

The Foolish bottom line                                                                                                              Kimberly Clark is a global titan that has shown a consistent revenue stream and rising earnings for many years. It is set to report fourth-quarter earnings in just a few days and I believe the current expectations are attainable. The stock is currently more than 6.75% below its 52-week high, so investors should consider initiating a position now and adding to it on any weakness in the coming days or following the report.