Colgate-Palmolive Co.'s (CL) third-quarter earnings rose a
bigger-than-expected 4.9% on lower overhead and interest-expense
costs, though negative currency moves more than offset sales growth
that trailed estimates.
President and Chief Executive Ian Cook said the consumer
products company anticipates "mid-single digit earnings per share
growth" for next year as it plans to strengthen its volume and
market share. Analysts polled by Thomson Reuters recently expected
earnings growth of 9% to $5.25 a share.
Sales growth for the world's largest toothpaste maker by sales
and market share have recently started to slow as Procter &
Gamble Co. (PG) makes a bigger push into the oral-care segment
globally, particularly in developing markets.
At the same time, while U.S. consumers have increased spending a
bit this year, they remain cautious owing to concerns about the
strength of the economy and persistently high unemployment.
Promotions and discounts to spur sales have pressured industry
margins.
Colgate reported a profit of $619 million, or $1.21 a share, up
from $590 million, or $1.12 a share, a year earlier.
Revenue decreased 1.5% to $3.94 billion as organic sales-- which
excludes the currency effects and the effects of acquisitions and
divestitures--grew 3% on volume growth of that amount.
Analysts most recently forecast earnings of $1.19 on revenue of
$4.03 billion.
Gross margin edged up to 59.4% from 59.2%, mostly driven by
prior cost cuts.
In Latin America, Colgate's largest market by revenue, total
sales fell 6% owing to currency impacts but were up by the same
percentage on an organic basis. Volume rose in nearly all its
markets, but was more than offset by a decline in Venezuela. Profit
fell 4%.
North American sales were up 2% on 3% volume growth, though
prices were down 1.5%. Profit rose 3% on higher sales and cost
cutting, partly offset by higher promotional and raw-materials
costs.
Shares closed Wednesday at $75.50 and were inactive premarket.
The stock is down 8.1% this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com