Consumer products major Colgate-Palmolive Co. (CL) on Thursday reported a 2 percent increase in profit for the third quarter despite a slight decrease in sales. Adjusted earnings per share matched analysts' expectations, while revenues missed their estimates.
Further, the New York-based company said that by 2016, it will reduce its workforce by about 6 percent from the current level of 38,600 employees, under a four-year Global Growth and Efficiency Program to boost its efficiency. The company projects annual savings of $365 to $435 million by the fourth year of the program.
Colgate-Palmolive expects the restructuring program to result in cumulative pretax charges between $1.10 billion and $1.25 billion, beginning with about $110 million to $120 million in the fourth quarter of 2012.
Colgate-Palmolive's global unit volume for the third quarter grew 2.0 percent and pricing increased 3.0 percent, while foreign exchange was negative 6.0 percent. Organic sales grew 5.0 percent, led by emerging markets where organic sales grew 9.5 percent.
Gross profit margin rose 220 basis points from the year-ago quarter to 58.4 percent.
Total oral, personal and home care sales decreased 1 percent $3.80 billion, while pet nutrition sales declined 2 percent to $528 million.
On a geographic basis, Greater Asia/Africa sales grew 5 percent, while North America net sales rose 2.5 percent. Meanwhile, Latin America sales were even with the year ago period and Europe/South Pacific sales decreased 11 percent.
Colgate-Palmolive's net income for the third quarter rose to $654 million or $1.36 per share from $643 million or $1.31 per share in the prior-year quarter.
Adjusted net income was $661 million or $1.38 per share, compared to adjusted net income of $641 million or $1.31 per share in the year-ago period. On average, 20 analysts polled by Thomson Reuters expected the company to earn $1.38 per share. Analysts' estimates typically exclude one-time items.
Net sales declined 1 percent to $4.33 billion from $4.38 billion in the comparable period last year. Analysts had a consensus revenue estimate of $4.39 billion.
Looking ahead to fiscal 2012, Colgate-Palmolive continues to expect earnings per share to grow at a double-digit rate, on a currency neutral basis.
However, earnings per share growth would be reduced by about 6 to 7 percent, if current currency rates remain. Analysts expect the company to earn $5.37 per share for the year.
CL closed Wednesday's regular session at $106.56, up $0.03 on a volume of 1.43 million shares.
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