Kimberly-Clark (NYSE:KMB), one of the world's largest consumer products manufacturers and the company behind brands such as Cottonelle, Huggies, Pull-Ups, Kotex, Scott, and Viva, just released its earnings results for the second quarter and its shares have reacted by making a sharp move to the downside. Let's take a deep dive into the company's earnings report and outlook on the rest of 2014 to determine whether this decline is our opportunity to buy or if we should avoid making an investment for the time being.

Source: Kimberly-Clark

The quarterly results are in
Kimberly-Clark released its second-quarter report before the market opened on July 22 and the results came in mixed compared to expectations; here's an overview:

MetricReportedExpectedYear Ago
Earnings Per Share $1.49 $1.50 $1.41
Revenue $5.34 billion $5.32 billion $5.27 billion

Source: Benzinga

Kimberly-Clark's earnings per share increased 5.7% and revenue increased 1.4% year-over-year, driven by global volume increasing 3% and organic sales increasing 5%; here's a breakdown of its revenue by segment:

SegmentQ2 2014 Revs.Q2 2013 Revs.Change
Personal Care $2,442 million $2,390 million 2.2%
Consumer Tissue $1,638 million $1,625 million 0.8%
K-C Professional $858 million $841 million 2%
Health Care $397 million $401 million (1%)
Corporate & Other $8 million $10 million (20%)
Total $5,343 million $5,267 million 1.4%

Source: Kimberly-Clark

Excluding certain items, operating profit increased 5.1% to $860 million and the operating margin showed great strength, expanding 60 basis points to 16.1%; this expansion came as the result of a reported $85 million in cost savings from the company's FORCE, or Focused On Reducing Costs Everywhere, program and its pulp and tissue restructuring, but was partially offset by the weakening of several currencies. The FORCE program has resulted in $145 million in savings year-to-date, so the program is on pace to achieve its yearly goal of $300 million in savings in 2014.

Source: Cottonelle's Facebook

Lastly, Kimberly-Clark reported $842 million in cash flow provided by operations and $101 million in capital expenditures, which resulted in free cash flow of $741 million. The company used this free cash flow and the $1.17 billion in cash and cash equivalents it had to begin the quarter to repurchase $476 million worth of its common stock and pay out $318 million in dividends. Kimberly-Clark has now repurchased $917 million of its shares year-to-date, which puts it on pace to reach its yearly goal of $1.3 billion-$1.5 billion in repurchases.

In summary, Kimberly-Clark posted a fantastic quarterly performance and its $794 million of repurchases and dividend payments once again proved its strong dedication to maximizing shareholder value. These results alone likely would have sent its shares higher, but the sentiment turned negative when the company provided its updated outlook on the full year...

What will the remainder of the year hold?
Following the strong quarterly results, it seemed like a sure thing that Kimberly-Clark would reaffirm its full-year outlook, but the company actually went on to lower the range of its earnings per share expectation. The company now anticipates earnings per share in the range of $6.00-$6.15 versus its previous expectation of $6.00-$6.20.

Source: Kimberly-Clark

Kimberly-Clark cited higher input costs and macro-economic headwinds in Mexico as two reasons why it reduced its guidance, as these will cause net income from its equity companies to be down year-over-year while it had expected flat-to-slight growth.

Thomas J. Falk, the company's chairman and chief executive officer, tried to put the reduction into perspective and provide reassurance to investors when he stated:

Half-way through the year, we are essentially on track with our overall plans. And while our narrower earnings guidance takes into account a slightly more difficult environment, we continue to be optimistic about our prospects to generate attractive shareholder returns.

With this information and Mr. Falk's comments in mind, investors must also recognize that Kimberly-Clark's updated guidance still calls for growth of 4%-6.6% from 2013. Even though this is significantly lower than the 9.9% growth the company achieved in fiscal 2013, it would still result in a very good year for the company; not to mention, it will continue to repurchase shares and pay its bountiful 3.1% dividend, which it has paid for 80 consecutive years and raised for an impressive 42 consecutive years. 

Source: Kimberly-Clark

The Foolish bottom line -- Should we buy?
Kimberly-Clark has one of the most impressive portfolios of global consumer product brands and these cash cows will provide consistent growth and income for many years to come. Its second-quarter earnings results were very strong and the company's updated outlook, although lower, still calls for solid growth in the second half of the year.

This allows us to reach the conclusion that the 3.09% decline following the release is a picturesque buying opportunity. Foolish investors should strongly consider initiating long-term positions right now and adding to them on any further weakness so price appreciation and Kimberly-Clark's beautiful 3.1% dividend can provide them with significant returns over the next several years.