Church & Dwight Co. Inc.'
) third-quarter 2013 earnings per share of 76 cents beat the
Zacks Consensus Estimate (2.7% positive surprise) by 2
cents. Moreover, the reported figure was 15.2% higher than 66
cents earned in the prior-year quarter.
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Among other major consumer product companies,
The Clorox Company
) posted a positive earnings surprise of 4.0%. On the other
Procter & Gamble Company
) reported bottom-line results that were in line with the Zacks
The top line for Church & Dwight improved 11.0% to $804.8
million due to robust performance of the acquired Avid gummy
vitamin business. However, it missed the Zacks Consensus Estimate
of $814 million. Organic sales increased 1.6% (within the
expected range of 1%-2%), driven by 4.7% growth in volume,
partially offset by a negative impact of 3.1% due to pricing and
adverse product mix.
Gross profit increased 11.5% year over year to $365.2
million. Moreover, gross margin expanded 20 basis points
(bps) to 45.4%, based on operating efficiencies and flat
commodity costs, partly offset by adverse price/mix. Notably,
this was the fifth successive quarter of gross margin expansion.
Operating income rose 15.4% year over year to 167.8 million in
the quarter. Moreover, operating margin expanded approximately 80
bps to 20.8%.
's net sales rose 14.1% year over year to $605.3 million, driven
by a 39.0% increase in personal care products revenues to $236.3
million and 2.4% growth in household products revenues to $369.0
Organic sales (excluding gummy vitamin business) nudged up 0.8%
in the quarter, due to rise in sales of ARM & HAMMER liquid
laundry detergents, TROJAN products, FIRST RESPONSE diagnostic
kits and OXICLEAN laundry additives. This was, however, partially
offset by sluggish sales of SPINBRUSH battery-powered
toothbrushes, NAIR depilatories and ARM & HAMMER powdered
laundry detergent and ARM & HAMMER cat litter.
Increase in sales marked a 4.5% improvement in volume, while
product mix and pricing unfavorably impacted sales by 3.7%.
's sales increased 2.6% year over year to $134.5 million. Organic
sales increased 3.7%, attributable to healthy sales in Canada,
France, Mexico, and the U.K.
' sales increased 2.0% to $65.0 million, while organic sales
declined 3.7% in the said quarter. Increased volumes led to sales
growth of 7.9% while unfavorable product mix and pricing led to a
4.2% decrease in sales.
Other Financial Details
Church & Dwight ended the quarter with cash and cash
equivalents of $445.5 million, long-term debt of $649.5 million
and shareholders' equity of $2,230.7 million. Moreover, for the
first nine months of 2013, it generated cash from operations of
$376.6 million and incurred $30.0 million in capital
On Oct 31, 2013, the company declared a dividend of 28 cents,
payable on Dec 2, 2013 to stockholders of record at the close of
business on Nov 11, 2013.
Management maintains its earlier guidance and expects innovative
product launches and cost-cutting endeavors to boost bottom-line
results further. The company anticipates earnings per share to be
$2.79 for 2013, up 14% year over year.
Church & Dwight forecasts organic sales to rise approximately
1.5% to 2% in 2013. Owing to its operating efficiencies, the
company now expects gross margin to expand by 75 bps as compared
with the prior year.
For the fourth quarter, earnings per share are expected to be 65
cents, up 14.0% year over year.
For 2014, on the basis of product innovation and higher market
spending, Church & Dwight expects organic growth of 3%-4%.
At present, Church & Dwight holds a Zacks Rank #3 (Hold).