CL Colgate Palmolive Co

One of world's leading manufacturer of consumer products, Colgate-Palmolive Company (CL) declared that its board of directors has approved a new share repurchase program, which reflects the company's sound financial position and well-defined future prospects.

Under this program, the company will be authorized to repurchase up to 50 million common share or approximately 10% of its outstanding shares, either through open market or privately-negotiated transactions over the next two-to-three years. The company had approximately 486 million outstanding shares as of June 30, 2011.

Colgate has always been committed to create value for its shareholders by returning capital in the form of dividends and share repurchase program. To improve shareholders' wealth, the company will repurchase shares from time to time depending on market conditions. These strategies will enhance shareholders' return and lift the market value of the stock.

On August 15, 2011, Colgate paid a regular quarterly cash dividend of 58 cents per share on its common shares, to stockholders of record as of July 26, 2011. Since 1895, the company has regularly paid cash dividend to its common shareholders.

Earlier, the company reported its second quarter 2011 quarterly result. Colgate's earnings per share grew 7.7% to $1.26 a share from $1.17 a share in the year-ago quarter. However, quarterly earnings remain in line with the Zacks Consensus Estimate.

Global net sales increased 9.5% year over year to $4,185 million based on an increase of 0.5% in pricing and 6% rise in foreign exchange coupled with a 3% addition from global unit volume. On an organic basis (excluding foreign exchange, acquisitions and divestitures), sales increased 3.5% in the quarter. Global net sales beat the Zacks Consensus Revenue Estimate of $4,159 million.

Colgate is expecting to achieve mid-single digit earnings per share growth in fiscal 2011 with the help of the company's aggressive growth initiatives coupled with strategic worldwide pricing efforts. However, higher inflationary situation may lead to a decline in gross margin in the range of 80 to 100 basis points compared with fiscal 2010.

Colgate is the industry leader in oral care and commands market-leading positions in many personal care product categories. Furthermore, a strong portfolio of globally recognized brands, including Colgate, Palmolive, Mennen, Softsoap, Irish Spring, Protex, Sorriso, Kolynos, Elmex, Ajax and Axion provide a competitive advantage to the company and strengthens its dominant position in the market.

Colgate-Palmolive, which competes with Procter & Gamble Company (PG) and Church & Dwight Company Inc. (CHD), maintains a Zacks #3 Rank, which translates into a short-term Hold recommendation. Our long-term recommendation on the stock remains Neutral.

 
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