Kimberly Clark Corporation (KMB) swung to a net loss for the quarter ended Dec. 31, 2014. The company has made a net loss of $83 million, or $ 0.22 a share in the quarter, against a net profit of $539 million, or $1.40 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $534 million, or $1.43 a share compared with $553 million or $1.44 a share, a year ago.

Revenue during the quarter went down marginally by 1.37 percent to $4,828 million from $4,895 million in the previous year period. Gross margin for the quarter contracted 160 basis points over the previous year period to 32.17 percent. Total expenses were 96.73 percent of quarterly revenues, up from 84.78 percent for the same period last year. That has resulted in a contraction of 1195 basis points in operating margin to 3.27 percent.

Operating income for the quarter was $158 million, compared with $745 million in the previous year period.

However, the adjusted operating income for the quarter stood at $769 million compared to $759 million in the prior year period. At the same time, adjusted operating margin improved 42 basis points in the quarter to 15.93 percent from 15.51 percent in the last year period.

Chairman and Chief Executive Officer Thomas J. Falk said, "In 2014, we met our top- and bottom-line growth commitments and made strategic changes to further improve our company. We delivered mid-single digit growth in organic sales and adjusted earnings per share from continuing operations. We generated $320 million in FORCE cost savings and returned $3.3 billion to shareholders through dividends and share repurchases. In addition, we spun off our health care business, initiated an organization restructuring and completed our European strategic changes. I’m encouraged with our execution in a challenging environment."

2015 Outlook and Key Planning Assumptions

The company’s key planning and guidance assumptions for 2015 are as follows:

• Net sales decrease of 3 to 6 percent.

• Organic sales growth of 3 to 5 percent, with volumes up 2 to 3 percent and changes in net selling prices and product mix, combined, up an additional 1 to 2 percent.

• Negative foreign currency exchange rate impact of 8 to 9 percent, including an approximate 3 point impact from the move to using the SICAD II exchange rate in Venezuela.

• Adjusted operating profit growth of 1 to 4 percent.

• Cost savings of at least $300 million from the company’s FORCE program.

• Savings of $60 to $80 million from the 2014 Organization Restructuring.

• Foreign currency translation effects are expected to negatively impact operating profit growth by 9 to 10 percent, including an approximate 4 point drag from the exchange rate change in Venezuela. Currency transaction effects are also anticipated to negatively impact comparisons.

• Deflation in key cost inputs of $0 to $150 million. The company is assuming North American market prices of $840 to $870 per metric ton for eucalyptus pulp, $50 to $60 per barrel for oil and $3.00 to $3.50 per MMBTU for natural gas. Oil-based costs are expected to be down year-on-year, although less than the anticipated decline in oil prices. Fiber costs are anticipated to be similar to or up slightly year-on-year. Inflation is expected for input costs in some international markets.

• Advertising spending is expected to increase somewhat as a percent of net sales to support targeted growth initiatives, brand building and innovation activities.

• Net income from equity companies is expected to be down somewhat compared to the prior year due to lower earnings at K-C de Mexico, driven by a weaker Mexican peso.

• Net income attributable to noncontrolling interests should decline year-on-year, driven by the redemption of $0.5 billion of preferred securities in December 2014.

• Adjusted effective tax rate between 31.5 and 33.5 percent in 2015 compared to 30.7 percent in 2014. A portion of the expected increase is related to the previously-mentioned preferred securities redemption.

• Adjusted earnings per share of $5.60 to $5.80, up 2 to 5 percent compared to adjusted earnings per share from continuing operations of $5.51 in 2014.

• Capital spending of $950 to $1,050 million.

• Defined benefit pension plan contributions up to $100 million.

• Dividend expected to increase mid-single digits, subject to approval by the Board of Directors. The anticipated increase is generally consistent with 2014 growth in adjusted earnings per share from continuing operations of 5 percent.

• Share repurchases are expected to total $0.8 to $1.0 billion, subject to market conditions.

Kimberly Clark Corp has generated cash of $2,845 million from operating activities during the year, down 6.41 percent or $195 million, when compared with the last year.

The company has spent $770 million cash to meet investing activities during the year as against cash outgo of $844 million in the last year. It has incurred net capital expenditure of $1,001 million on net basis during the year, up 21.48 percent or $177 million from year ago.

The company has spent $1,893 million cash to carry out financing activities during the year as against cash outgo of $2,185 million in the last year period. It has made net debt repayment of $1,355 million. It has spent net of $1,812 million on repurchase of common stocks.

Cash and cash equivalents stood at $789 million as on Dec. 31, 2014, down 25.14 percent or $265 million from $1,054 million on Dec. 31, 2013.

Working capital turns negative

Working capital of Kimberly Clark Corp has turned negative to $667 million on Dec. 31, 2014 from positive $702 million on Dec. 31, 2013. Current ratio was at 0.89 as on Dec. 31, 2014, down from 1.12 on Dec. 31, 2013.