On Monday, Kimberly-Clark (NYSE:KMB) will release its quarterly report, and investors have sent shares of the consumer-products giant to new heights. Yet even as the company has held its own against Procter & Gamble (NYSE:PG), Colgate-Palmolive (NYSE:CL), and a host of other competitors in the household-products space, the big question facing Kimberly-Clark is whether its stock price can continue to appreciate even if earnings and sales growth stall.

Kimberly-Clark products are ubiquitous in households in the U.S. and abroad, with its Kleenex tissue just the tip of the iceberg when it comes to brand names that millions of customers worldwide know and love. Yet the battle for riches is particularly fierce in high-growth emerging markets, where a rising consumer class seeks to improve its standard of living with the goods that Kimberly-Clark and its peers offer. Can Kimberly-Clark collect its share of growth, or has the stock already seen its best days? Let's take an early look at what's been happening with Kimberly-Clark over the past quarter and what we're likely to see in its report.

Source: Kimberly Clark.

Stats on Kimberly Clark

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$5.32 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Are Kimberly-Clark earnings stagnating?
In recent months, analysts have had mixed views on Kimberly-Clark earnings, reducing first-quarter estimates by $0.02 per share but raising their full-year 2014 and 2015 projections by similarly modest amounts. The stock has performed well, rising 8% since mid-January.

Kimberly-Clark's fourth-quarter report gave investors great optimism about its future, with 5% earnings growth overcoming relatively flat total revenue. Strict cost controls helped the company's operating margin expand by almost a full percentage point, and Kimberly-Clark gave encouraging guidance for 2014, including substantial share repurchases and earnings-per-share growth that could come in between 4% and 7.5% despite another year of challenging conditions on the revenue front. Those results were relatively consistent with what Procter & Gamble reported at the time, reflecting the conditions in the industry as a whole.

Source: Kimberly Clark.

From a big-picture perspective, Kimberly-Clark is making moves aimed at increasing efficiency and profitability. A restructuring of its global operations will include spinning off the company's health-care business, which makes catheters, surgical masks, and sterile bandage wraps. Most of that unit's revenue comes from North America, but the strategic move is just a piece of a broader plan that has eliminated similar subpar-margin businesses from the Kimberly-Clark lineup in favor of more profitable business lines.

Kimberly-Clark also recognizes the pressure that Procter & Gamble, Colgate-Palmolive, and other competitors are putting on its business. Back in January, CEO Tom Falk pointed out that most investors in the United states might never have heard of many of Kimberly-Clark's strongest adversaries simply because their worldwide operations exclude exposure to the U.S. market. Part of the price of competing around the world is dealing with companies with stronger roots in the markets Kimberly-Clark is trying to enter. By remaining as efficient as possible, Kimberly-Clark is making the most of its opportunities and rewarding shareholders for their commitment.

In the Kimberly-Clark earnings report, watch to see how well the company keeps fighting rising raw-materials costs while maintaining its profit margin. If Kimberly-Clark can keep producing organic growth even under tough conditions, it could really start to grow in earnest if economic growth around the world rebounds.

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