Earnings Previews: Kimberly-Clark, Otis Worldwide, Restaurant Brands

Of nearly 80 companies in our watch list that reported earnings late Wednesday or before markets opened Thursday, more than 15 posted negative earnings surprises and just two met expectations exactly. More than 20 missed revenue estimates and three others matched sales estimates.

Missing Wall Street’s revenue estimates is arguably a more serious offense than missing earnings estimates. AT&T, however, beat on profits, fell short by 6% on revenue and the stock traded higher shortly after the opening bell. Larger-than-expected subscriber growth among contract customers tipped the balance.

We already have previewed four companies scheduled to report September-quarter results after markets close Wednesday or before they reopen on Friday: American Express, Cleveland-Cliffs, Intel and Schlumberger.

Here’s a look at three firms reporting quarterly results first thing on Monday. As usual, no quarterly reports are scheduled for release Friday afternoon.


Consumer staples giant Kimberly-Clark Corp. (NYSE: KMB) lost more than 8% from its share price over the past 12 months. The tumble began when the company reported third-quarter earnings and shares retreated almost 11%. It’s taken Kimberly-Clark almost a full year to get that 3% back. When rival Procter & Gamble reported earlier this week, Kimberly-Clark’s stock price fell by 1.3% while P&G’s stock lost about 1.2%. The problems facing both companies are similar: rising costs, supply chains and pricing power.

Of 19 surveyed analysts covering the company, 12 have placed a Hold rating on the shares. Another four have rated the shares a Buy or Strong Buy. At a recent price of around $131.80, the upside potential based on a median price target of $136.50 is about 3.6%. At the high price target of $164, the upside potential is 24.4%.

Revenue for the third quarter is forecast at $4.96 billion, which would be up 5.1% sequentially and up 6% year over year. Adjusted earnings per share (EPS) are forecast at $1.65, 12.3% higher sequentially but down about 3.5% year over year. For full fiscal 2021, analysts are looking for EPS of $6.70, down 13.4%, on sales of $19.42 billion, up about 1.5%.

Kimberly-Clark stock trades at 19.4 times expected 2021 EPS, 17.4 times estimated 2022 earnings and 16.4 times estimated 2023 earnings. The stock’s 52-week range is $128.02 to $144.44, and the company pays an annual dividend of $4.56 (yield of 3.46%). That yield is a full percentage point higher than P&G’s.

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