UPDATE 3-Clorox profit up, raises full-year forecast

* Q2 EPS 77 cents tops Street view by a penny

* Sales up 5 pct to $1.28 bln vs view of $1.25 bln

* Raises fiscal 2010 view

* Shares unchanged
(Adds analyst quotes; updates category sales, share moves)

NEW YORK, Feb 4 (BestGrowthStock) – Clorox Co (CLX.N: ) posted a
better-than-expected 28 percent increase in quarterly net
profit and raised its fiscal 2010 earnings forecast, with sales
growth boosted by demand for disinfecting wipes.

For the past few quarters, Clorox has seen a lift from the
H1N1 swine flu pandemic. Swine flu drove 2 percentage points of
sales growth in the previous quarter and was a key contributor
in the latest quarter as well.

“We believe this was a very strong quarter, with upside
primarily driven by higher-than-anticipated top line and gross
margin,” J.P. Morgan analyst John Faucher said in a research
note.

But Clorox became the latest U.S. consumer goods company,
following Colgate-Palmolive Co (CL.N: ) and Procter & Gamble Co
(PG.N: ), to say the recent devaluation of the Venezuelan bolivar
was eating into profits, and reported a loss of $12 million, or
6 cents per share, related in part to the devaluation.

The maker of household goods such as Clorox bleach and Glad
trash bags earned $110 million, or 77 cents per share, in its
fiscal second quarter, ended on Dec. 31, compared with a profit
of $86 million, or 61 cents per share, a year earlier.

Analysts on average were expecting earnings of 76 cents per
share, according to Thomson Reuters I/B/E/S.

Sales rose 5 percent to $1.28 billion, topping the average
analyst forecast of $1.25 billion, according to Thomson Reuters
I/B/E/S. Sales by volume also rose 5 percent.

Clorox said lower commodity costs and price increases
abroad were more than enough to make up for higher production
costs, and fueled a 3.9 percentage point increase in its gross
margin. Higher advertising spending to fend off competitors ate
into those gains.

Clorox’s Brita water-filtration line of products
contributed to a 10 percent rise in sales in its “lifestyle
category” that also includes personal care products, as well as
dressings and sauces. In terms of volume, sales rose 12 percent
in that category.

Volume of household products, which include garbage bags
and cat litter, was flat, but overall sales in the segment fell
fell 6 percent due in part to lower prices of Glad trash bags.

BETTER LOOKING 2010

Clorox, based in Oakland, California, raised its profit
outlook on Thursday, saying it expects 2010 earnings per share
of $4.10 to $4.25. It also forecast an overall sales rise of 1
percent to 2 percent, a range that Edward Jones analyst Jack
Russo said was cautious.

“Clorox being cautious makes a lot of sense,” Russo said.

Analysts on average were expecting profit of $4.21 per
share, after the company raised its forecast in November to a
range of $4.05 to $4.20 per share.

Clorox shares were unchanged at $60.66 on the New York
Stock Exchange, outperforming the Standard & Poor’s 500 index
(.SPX: ), which was down 2.4 percent early Thursday afternoon.

Investment Basics

(Reporting by Martinne Geller, Michele Gershberg and Jessica
Wohl and Phil Wahba; Editing by Gerald E. McCormick, Dave
Zimmerman and Richard Chang)

UPDATE 3-Clorox profit up, raises full-year forecast