DOW JONES NEWSWIRES
Colgate-Palmolive Co. (CL) reported a 20% increase in
fourth-quarter net income amid a year-earlier restructuring charge
and as sales edged up, though margins were hurt by the stronger
dollar and price increases failed to offset higher in raw material
and packaging costs.
Colgate-Palmolive, whose products include its namesake
toothpaste and dish soap, posted net income of $497 million, or 94
cents a share, compared with $414.9 million, or 77 cents a share, a
year earlier. The latest results included $30.5 million in
restructuring charges from its overhaul plan begun in 2004; the
year earlier had $75.8 million. Excluding charges, earnings rose to
$1 from 91 cents.
Revenue edged up 0.6% to $3.66 billion, as unit volume increased
1%. Organic sales, excluding the stronger dollar, acquisitions and
divestemnts, were up 9%.
Analysts polled by Thomson Reuters expected earnings of 98 cents
a share on revenue of $3.7 billion.
Gross margins edged down to 56% from 56.1%, hurt by the stronger
dollar and as price increases trailed significant increases in raw
material and packaging costs. Global pricing increased 7.5%.
North American sales rose 1.5%, as volume declined 3.5%. Sales
were helped by new product launches which contributed to market
share gains across all categories.
Latin American sales were up 5.5%, with a 5% increase in volume,
while Europe/South Pacific posted a 13% drop in sales as a slight
increase in prices failed to offset the stronger dollar.
Chief Executive Ian Cook said the recent retreat in commodity
and oil prices, coupled with higher pricing and continuing
aggressive savings programs, should offset the expected impact of
the stronger dollar in the first and second quarters, boosting
margins.
"Overall, despite the global economic slowdown, we are
comfortable with external profit expectations for the first quarter
and full year 2009," he said.
Consumer-product multinationals have seen some relief from high
commodity and energy prices after last summer's price spikes,
though some companies have lowered their sales outlooks amid a
demand slump as retailers, distributors and consumers cut back
inventories.
Kimberly-Clark Corp. (KMB), one of the first consumer-products
companies to report, posted an 8.1% drop in fourth-quarter net
income, saying the economic weakness impacted product categories
more than anticipated.
Still, household-product and food companies have held up better
than makers of more discretionary products. Earnings in the
consumer-staples sector, which includes companies that make
everyday items like soap and trash bags, were expected to increase
3.5% for the latest quarter, according to Thomson Reuters.
Shares closed Wednesday's session at $63.85 and weren't active
premarket. The stock has fallen 21% since September.
-By Shirleen Dorman, Dow Jones Newswires; 201-938-2310;
shirleen.dorman@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front
page of today's most important business and market news, analysis
and commentary. You can use this link on the day this article is
published and the following day.