Colgate-Palmolive Co. (CL) second-quarter earnings rose 7.3% as
the consumer-products company's sales and volume continued to
improve.
Still, sales missed analysts' expectations.
Many consumer-products makers have raised spending on
advertising and promotions and have rolled out new products to
appeal to bargain-hunting consumers.
Colgate's sales began to pick up late last year as consumer
spending on branded goods showed improvement from subdued levels
during the recession.
It reported a profit of $603 million, or $1.17 a share, up from
$562 million, or $1.07 a share, a year earlier. Revenue increased
2% to $3.81 billion. Organic sales--which exclude currency
fluctuations, acquisitions and divestitures--rose 3.5% as volume
grew 3% and prices edged up 0.5%.
Analysts polled by Thomson Reuters most recently forecast
earnings of $1.16 on revenue of $3.94 billion.
Gross margin was flat at 58.8% as cost-cutting benefits were
offset by impact from Venezuela's currency devaluation, which will
hit 2010 profit more than previously thought.
North American sales, which account for 20% of the total, rose
4.5% as prices fell 1.5% and volume increased 5%. Colgate's
toothpaste market share increased to 44.4%.
Latin America sales, which comprise 28% of Colgate's total,
organic sales were up 8% as volume grew 1% as volume increases in
nearly every country, offset declines in Venezuela.
Its Hill's pet-food segment, which contributes 13% of sales,
sales were down 7.5%, while volume and prices both declined by
4%.
Shares closed Wednesday at $83.86 and were inactive
premarket.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com;