Colgate-Palmolive Co. (CL) reported fourth-quarter earnings rose
27% as the consumer-goods maker benefited from higher prices,
stronger margins and increased sales volume.
While pressure continues from competing lower-priced goods,
Colgate has been perceived as holding up better since it focuses on
inexpensive staples such as toothpaste and soap. The company has
been focusing on building volume, which was up 3% in the quarter,
through increased marketing and lowering some prices at its Hills
pet food segment.
Colgate reported a profit of $631 million, or $1.21 a share, up
from $497 million, or 94 cents a share, a year earlier. Revenue
increased 12% to $4.08 billion. Excluding currency fluctuations,
acquisitions and divestitures, sales rose 6.5%.
Analysts polled by Thomson Reuters most recently forecast
earnings of $1.18 on revenue of $4.08 billion.
Gross margin climbed to 59.5% from 56% amid higher prices and
cost cutting.
Sales were up across the company, except for its Hill's pet
segment. It had a 1.5% drop amid a 8.5% decline in volume.
The consumer giant and others that expanded their Latin American
businesses to offset slower U.S. growth are likely to take a hit
from Venezuela's recent currency devaluation in the current
quarter.
Chairman and Chief Executive Ian Cook said, "We are particularly
pleased that our renewed focus on unit volume growth is indeed
working" with global volume increasing sequentially in each of the
past two quarters. Cook said higher margins allowed higher
advertising spending to help drive growth. The company expects to
keep its momentum this year despite the weak economy and
Venezuela's currency devaluation, boding well for "another year of
double-digit earnings" growth this year.
Shares closed Wednesday at $80.39 and didn't trade
premarket.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com