Clorox’s Quarterly Earnings Drop 5%

Clorox Co., the maker of Clorox bleach, Brita water filters and other consumer products, posted a 5% drop in profit Tuesday for its fiscal first quarter as it restructured some operations.

For the three months ended Sept. 30, Oakland-based Clorox reported net income of $123 million, or 57 cents a share, compared with $129 million, or 60 cents, a year earlier.

The latest results include pre-tax charges of $30 million, or 9 cents a share, for restructuring and asset impairment at a unit that makes Glad trash bags.

In September, Clorox forecast fiscal first-quarter earnings of 53 cents to 55 cents a share, including a restructuring charge of about 9 cents a share.

Analysts surveyed by Thomson First Call expected earnings of 54 cents a share on sales of $1.1 billion.

Sales grew 4% to $1.09 billion from $1.05 billion.

Shares of Clorox fell $1.38 to $53.77 on the New York Stock Exchange.

Gross profit margins ran about 9 percentage points higher than last year’s 45%, as strong cost savings helped offset higher prices for raw materials.

Under a deal with household-goods maker Henkel announced in September, Clorox will exchange ownership interest in a subsidiary for Henkel’s approximately 61.4 million shares of Clorox common stock. Clorox expects the transaction, likely to close by the end of the month, to result in a gain of $3 to $3.15 a share.

The company said the transaction shouldn’t have an effect on its second-quarter outlook but would affect full-year expectations. It continues to expect second-quarter earnings of 48 cents to 52 cents a share on a 3% to 5% rise in sales.

Despite the growth in first-quarter margins, Clorox maintained its full-year earnings forecast excluding the effect of the Henkel deal, citing rising commodity costs. The company expects sales to grow 3% to 5% and sees earnings of $2.58 to $2.66 a share for fiscal year 2005.