Ladies and gentlemen, thank you for your patience in holding. We now have your speakers in conference. Please be aware that each of your lines is in a listen-only mode. At the conclusion of today's presentation, we will open the floor for questions. At that time instructions will be given as to the procedure to follow them if you would like to ask an audio question.
It is now my pleasure to introduce Mr. Paul Alexander.
Thank you, and good morning, everyone. Welcome to Kimberly-Clark's Third Quarter Earnings Conference Call. With us today are Tom Falk, Chairman and CEO; Mike Hsu, President and COO; and Maria Henry, our CFO.
Here's the agenda for our call. Maria will start with a review of third quarter results. Tom will then provide his perspectives on our results and the outlook for the full year. And we'll finish with Q&A. As usual, we have a presentation of today's materials in the Investors section of our website.
(Forward-Looking Cautionary Statements)
And lastly, we'll be comparing our 2017 results to 2016 adjusted results, which exclude certain items described in this morning's news release.
And now I'll turn it over to Maria.
Thanks, Paul. Good morning, everyone, thanks for joining the call today. Let me start with the headlines for the third quarter. We continue to deliver earnings growth and returned to positive sales growth territory in a challenging environment. We achieved excellent cost savings and reduced our discretionary spending and we returned significant cash to shareholders.
Now, let's look at the details starting with sales. Our third quarter net sales were $4.6 billion, up 1% year-on-year. Organic sales rose slightly, and Tom will provide more color on our top line in just a few minutes.
On profitability, third quarter gross margin was 35.8%, that's down 60 basis points as input cost inflation and lower pricing more than offset our strong cost savings.
Commodities were $115 million drag in the quarter, and we now expect full year inflation will be slightly above our previous estimate of $200 million to $300 million. This outlook includes somewhat higher cost estimates for pulp and polymer resin. Helping to offset that inflation, our teams' continue to deliver significant FORCE cost savings, with third quarter savings of $125 million.
Moving down the P&L. Between-the-lines spending was down 60 basis points year-on-year. As we mentioned on our earnings call in July, we're tightly managing overhead and discretionary spending in this environment. Our third quarter operating margin was 18.4%, up 20 basis points year-on-year. I'm encouraged with the margin improvements we achieved in our Personal Care and K-C Professional business segments and in the developing and emerging markets overall.
On the bottom line, third quarter earnings per share was $1.60, up 5% year-on-year. Lower equity income reduced earnings by about $0.03 per share, offset by a slightly better effective tax rate worth about the same amount.
Now, let's turn to cash flow. Cash provided by operations in the third quarter was $805 million and in
VP of IR
Chairman and CEO
President and COO
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