Kimberly-Clark reduces lower end of annual earnings forecast

Kimberly-Clark Corp, the maker of Scott toilet paper and Huggies diapers, cut the lower end of its 2011 profit forecast, citing increasing materials costs. The shares fell the most in six months. The company more than doubled its estimate for raw materials expense inflation this year. Chief Executive Officer Tom Falk plans to raise prices for most of the items Kimberly- Clark sells in North America and bring down costs to obtain goods to counter the increase.

First-quarter sales rose four per cent to $5.03bn, compared with the $4.98bn average analyst estimate. Kimberly-Clark now estimates that price increases for pulp, resin and other items needed to make its products could total $450 million to $550m this year, from a previous forecast of up to $250m. The company’s tissue brands include Cottonelle toilet paper, Kleenex and Scott.