Boston, MA 09/23/2014 (wallstreetpr) – Manufacturer of consumer and professional products, The Clorox Co (NYSE:CLX) disclosed that it would exit its operations from Venezuela through its partner, Corporaction Clorox de Venezuela S.A., since it was not viable and decided to sell its assets. This is likely to save the company 12 cents of earnings per share annually.
Exit Venezuela
The Clorox Co (NYSE:CLX) said that it was a tough decision to be taken in the wake of economic challenges and the efforts put in by those concerned to operate its business, its statement revealed. For close to three years, the company was made to sell over two-thirds of its produces fixed by the local government. At the same time, the company in Venezuela faced triple-digit inflation resulting in a big rise in input costs, including wages, transportation, raw materials and packing.
The Clorox said that it was only incurring more operational losses as a result of the pricing restrictions. It said that its efforts to meet with the government authorities to make them understand the falling state of the business and the need to lift the prices failed to have any desired effect. Though the government has given its nod to increase the prices, it fell too short of the requirement to run a business. It indicated that its other international business would not be impacted as a result of exiting Venezuela.
Savings From Exit
Citigroup Inc (NYSE:C) analyst, Wendy Nicholson, said that the Clorox would be able to save 12 cents of earnings per share from the exit of Venezuela business operations, Benzinga reported. He also said that the rumors about the company being targeted by an unidentified suitor were not true and that the exit of Venezuela was positive news for the shares of the Clorox. He said that the unit suffered a loss of $23 million annually before interest and taxes though it represented 1.4% of The Clorox Co (NYSE:CLX)’s annual sales.
Company Confirms Outlook
The Clorox Co (NYSE:CLX) has confirmed its fiscal year 2015 earnings from continuing operations guidance of $4.35 – $4.50 a share and sales to remain flat with the last year.
