The company reported earnings of $1.46 a share, topping consensus estimates calling for $1.31 a share, according to FactSet. Sales of $1.45 billion were in line with expectations. Organic sales were flat.

The company reported earnings of $1.46 a share, topping consensus estimates calling for $1.31 a share. Sales of $1.45 billion were in line with expectations.

Clorox solidly beat earnings expectations for the quarter ended in December, sending the stock higher in early trading Tuesday.

The company reported earnings of $1.46 a share, topping consensus estimates calling for $1.31 a share, according to FactSet. Sales of $1.45 billion were in line with expectations. Organic sales were flat.

Clorox’s gross margin in its fiscal second quarter rose to 44.1% from 43.7% a year earlier. The company said cost-saving initiatives and price increases helped offset higher trade-promotion spending and manufacturing and logistics costs.

“I feel good about the progress we’re making, which is reflected in our second-quarter results, particularly the fifth consecutive quarter of gross margin expansion and sequential improvement in organic sales,” CEO Benno Dorer said in the news release.

The company raised the low end of its full-year earnings-per-share outlook to between $6.10 and $6.25, from a previous range of $6.05 to $6.25. The company’s outlook for organic sales falls in a range of no growth to 2% growth. That is down from a previous guidance of between 1% and 3% growth.

“We have confidence we’re taking the right steps as we expect to return to growth in the back half of the fiscal year behind strong investments in our robust innovation plans to support distribution,” Dorer said.

Morgan Stanley analyst Dara Mohsenian said the report had clear positives and negatives.

“We expect a positive stock reaction, as a [second-quarter] beat is good news with organic sales and [gross margin] upside, as is a raised low-end of fiscal-year EPS guidance,” he wrote in a note on Tuesday. “We take a more pessimistic view, as CLX is again lowering its fiscal-year organic sales growth guidance.”

Mohsenian doesn’t think Clorox stock can hold its valuation at 24 times estimated 2021 earnings, ahead of peers Colgate-Palmolive (CL) and Procter & Gamble (PG). He has an Underweight rating with a $134 price target.

Clorox stock (ticker: CLX) was up 4.2% to $162.44 Tuesday morning. The Dow Jones Industrial Average was up 1.6%.

Write to Connor Smith at connor.smith@barrons.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.