Reports Strong Quarterly Sales Fuel Big Jump in Earnings

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CINCINNATI ( -- Clorox Co. said today it has reassigned three key executives, promoted a fourth and put its Brazilian business up for sale -- all as it reported its earnings beat Wall Street estimates.

The marketer announced that George Roeth, 41, vice president of marketing, has been named to the newly created post of vice president of growth and strategy, where he'll focus on developing long-term growth opportunities for the Clorox, a spokesman said. David Matz, 40, who was vice president and general manager of laundry and home care, succeeds Mr. Roeth. Replacing Mr. Matz at the key laundry and home care unit is Glenn Savage, 47, formerly vice president and general manager of the Glad business. Beth Springer, 38, who had been vice president of marketing at Glad, becomes vice president and general manager of the unit.

Selling Brazilian business
Clorox also said it plans to sell its Brazilian home-care business and take a $13 million charge to cover asset writedowns related to it after failing in repeated attempts to make acquisitions there.

"In order to be successful

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in Brazil, we needed to have critical mass there," a spokeswoman said. But Clorox last year twice backed away from a deal to buy Bombril, a leading maker of home-cleaning products that would have given it that scale, citing Bombril's failure to meet contingencies in the agreement.

"We looked at other acquisitions and couldn't find a good strategic fit," the spokeswoman said. "We couldn't see a path to critical mass."

The decision to sell the Brazilian business wasn't prompted by this week's election of leftist President Luiz Inacio "Lula" da Silva, nor does it signal Clorox will exit Argentina and Colombia, where it feels it does have the scale to compete effectively, she said.

International sales down
Clorox's sales were down 13% in its international unit for the fiscal first quarter, ended Sept. 30, on a volume decline of 7%. Pre-tax earnings for the unit, made up primarily of Latin American operations, fell 24% excluding discontinued operations.

Overall, the marketer of Clorox bleach, Hidden Valley dressing and Brita water filtration systems reported quarterly net earnings of $145 million, or 65 cents a share, compared with $79 million, or 33 cents a share, a year ago. Analysts had on average forecast earnings of 54 cents per share, according to Thomson First Call.

Sales from continuing operations rose 6% to $1.05 billion, led by the Clorox ReadyMop floor cleaning system launched earlier this year.

In addition to the increased sales, the company cited lower raw material costs and savings from restructuring as helping to boost profits for the quarter.

Raises full-year forecast
Clorox raised its full-year earnings forecast to between $2.18 and $2.23, up 59% to 67% from a year ago. Unit volume and sales growth should increase in the low single digits for the year, the company said, as restructuring savings drive most of the profit growth.

The company said it is searching for a successor for Chairman-CEO Craig Sullivan, whose contract runs through 2003. Mr. Sullivan said during a conference call with analysts today that the company has retained an executive search firm for the process, though he said President-Chief Operating Officer Jerry Johnston is a "strong, serious candidate."

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