Colgate-Palmolive Co. (CL) Thursday reported a sharp decline in first-quarter profit, reflecting Venezuela currency devaluation as well as restructuring charges. Excluding items, adjusted earnings matched analysts' consensus estimates, benefited by strong organic sales growth worldwide.
The New York-based consumer goods major anticipates another year of strong organic sales growth and gross margin expansion in 2013. For the year, the company continues to expect earnings per share to grow 5.5 to 6.5 percent.
Organic sales, or net sales excluding foreign exchange, acquisitions and divestments, grew 6.0 percent from last year, with solid unit volume gains and higher pricing worldwide. The company said all operating divisions achieved positive organic sales growth, driven by emerging markets, where organic sales climbed 9.5 percent.
Ian Cook, chairman, president and chief executive officer of the company said, "We are very pleased to begin the year with strong top and bottom line growth, building on the growth momentum we saw in 2012. Gross profit margin, operating profit margin and net income as a percent of sales all increased versus the year ago period."
The company stated that its global market shares in toothpaste and manual toothbrushes are both at record highs year-to-date.
In the first quarter, net income attributable to the company declined to $460 million or $0.97 per share from $593 million or $1.23 per share in the previous year.
The recent-quarter results included a one-time charge of $0.23 per share related to the Venezuelan currency devaluation on February 9, 2013 and $0.12 per share charges from the implementation of the previously disclosed four-year Global Growth and Efficiency Program and costs associated with the sale of land in Mexico.
Excluding items, earnings were $1.32 per share in the first quarter of 2013. On average, 21 analysts polled by Thomson Reuters expected the company to earn $1.32 per share. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 2.5 percent to $4.32 billion from $4.20 billion in the prior-year quarter, which also came slightly above analysts' consensus estimate of $4.30 billion.
Global unit volume grew 4.0 percent and pricing increased 1.5 percent from last year. Foreign exchange was negative 3.0 percent.
For full year 2013, the company continues to expect earnings per share to grow 5.5 to 6.5 percent, on a dollar basis. The outlook is based on the ongoing impact of the Venezuela currency devaluation in 2013, which is expected to be $0.05 to $0.07 per quarter.
CL closed Wednesday's regular trading at $117.9 on the NYSE. In the pre-market activity, the shares are up 2.8 percent.
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