DOW JONES NEWSWIRES
Colgate-Palmolive Co.'s (CL) first-quarter net income rose 8.9%
on margin increases as higher prices.
Consumer-products makers usually hold up better than other
sectors in economic downturns, but as the economy worsened late
last year consumers delayed restocking their pantries.
Shoppers also began turning to lower-price store brands, though
Colgate, with a big presence in toothpaste and bodywash, is
considered less vulnerable than some of its rivals to private-label
inroads.
Colgate reported net income of $507.9 million, or 97 cents a
share, up from $466.5 million, or 86 cents a share, a year earlier.
The prior year included 4 cents in restructuring charges.
Revenue decreased 5.7% to $3.5 billion. Organic sales - which
exclude currency effects, acquisitions and divestments - grew 8% on
flat volume and higher prices.
Analysts polled by Thomson Reuters most recently were looking
for earnings of 96 cents on revenue of $3.6 billion.
Gross margin rose to 57.5% from 56.6%; the gain would have been
0.2 percentage point absent the restructuring charges. Higer prices
and cost-cutting helped results.
Chairman and Chief Executive Ian Cook said the company was
"delighted" with the organic-sales gain and margin increase. He
added falling commodity costs should help boost margins further as
the year progresses.
Volumes rose 2% in North America, where Colgate gets 21% of its
sales. Latin America, home to 26% of sales, saw a 1.5% volume rise
but Colgate had weakness in the Europe/South Pacific region and saw
a 7% volume drop for its Hill's pet-food business.
Shares closed at $59.71 on Wednesday and didn't trade premarket.
The stock is down 13% this year.
-By Tess Stynes and Kevin Kingsbury, Dow Jones Newswires;
201-938-2473; tess.stynes@dowjones.com