ATML Earnings Action

Clorox Co. (CLX) first quarter earnings were good – profit of $.91 a share on $1.38 billion in sales, beating Street expectations of $.84 on $1.24 billion. And the consumer products company reiterated fiscal 2009 guidance of $3.60 to $3.75. That was despite projecting growth of only 4-6% vs. the previously issued range of 6-8% because of foreign currency devaluation versus the U.S. dollar (20% of sales are outside the United States). Management believes it could get there as it forecasted a better second half with gross margin improvement, though a lot would have to play in its favor - continued lower commodity costs, higher cost savings and consumers absorbing higher prices to offset foreign currency declines and higher interest costs. That’s something plausible, but even if that’s the case, with Clorox up 18.9% over the last four sessions and trading at a PE of 17.1 for fiscal year 2009, more expensive than the likes of Colgate Palmolive and Proctor and Gamble, the stock seems to have the outlook priced in already.