), a global dealer in consumer goods, came up with second-quarter
2012 adjusted earnings of $1.33 per share, which was in line with
the Zacks Consensus Estimate. However, earnings per share increased
6% from the year-ago quarter.
Global sales of $4,267 million surged nearly 2% from the prior-year
quarter, up $18 million from the Zacks Consensus Estimate of $4,249
million. Sales in the quarter mainly benefited from a 3.5% upside
in pricing and 5.5% increase in global unit volumes (excluding
divested businesses), offset by a 6.5% negative impact from foreign
exchange. On an organic basis (excluding foreign exchange,
acquisitions and divestitures), the company recorded sales growth
Adjusted gross profit margin expanded 50 basis points to 57.9%,
driven by increased prices as well as cost savings from the
company's funding-the-growth initiatives. This was offset in part
by higher raw and packaging material expenses and negative foreign
exchange transaction costs. Selling, general and administrative
expenses, as a percentage of revenue, rose 20 basis points to
34.2%, on account of a 4% rise in advertising costs.
Second quarter adjusted operating profit of $1,001 million rose 3%
compared to last year. On a reported basis, including costs
associated with the business realignments and the sale of land in
Mexico, operating profit inched up 1% to $982 million while
operating margin contracted 10 basis points to 23.0%.
Colgate-Palmolive's market share of global toothpaste and manual
toothbrushes are at record highs year to date at 45.0% and 32.8%,
respectively. Both global toothpaste and manual toothbrushes share
represented an increase of 0.6 share points from the year-ago
sales (18% of total sales) increased 2% in the quarter. The growth
was primarily driven by a 3.0% upside in prices, offset a 0.5%
decline in unit volume and 0.5% currency impact.
On an organic basis, sales increased 2.5%. Segment operating
profit inched up 1% to $196 million while operating margin
contracted 25.9%, due to higher selling, general and administrative
expenses as a percentage of net sales, offset by lower gross profit
sales (29% of total sales) grew 3.0% as unit volume jumped 9.5% and
pricing rose 6.0%, partially offset by negative foreign exchange
impact of 9.5%. Volume gains were most prominent in Brazil,
Venezuela, Mexico and Colombia. On an organic basis, sales
Consequently, operating profit climbed 2% to $367 million from the
prior-year quarter. Moreover, operating margin contracted to 28.9%,
primarily due to an increase in advertising expenses as a
percentage of sales, and lower gross profit margin.
sales (20% of total sales) dipped 1.0%, given a solid 9.5% upside
in unit volume while pricing and foreign exchange had a 1.5% and
9.0% negative impact on growth, respectively. The Sanex acquisition
contributed 6.5% to sales during the quarter.
Volume gains were primarily led by better performance in France,
Iberia, Australia, the United Kingdom and the GABA business.
Organic sales for the region were up 1.5%.
CHURCH & DWIGHT (CHD): Free Stock Analysis
COLGATE PALMOLI (CL): Free Stock Analysis
PROCTER & GAMBL (PG): Free Stock Analysis
To read this article on Zacks.com click here.
Operating profit rose 5% year over year to $179 million.
Furthermore, the operating profit margin in the region increased to
21.1%, driven by higher gross profit margin and lower SG&A
expenses as a percentage of sales.
sales (20% of total sales) climbed 5%, with a 7.5% increase in unit
volume, primarily led by volume gains in India, Russia, South
Africa, the Philippines and Thailand. Pricing contributed 5.0% to
growth while the Sanex acquisition added 0.5%, which was offset by
a 7.5% negative impact from foreign currency. On an organic basis,
sales grew 12.0%.
Operating profit rose 11% to $220 million on account of improved
gross margins, which came from higher prices and cost benefits from
the company's funding-the-growth initiatives. Operating profit
margin also rose to 25.6%.
Hill's Pet Nutrition
sales (13% of total sales) inched down 1.0%. Unit volume decreased
3.0% as volume declines in the U.S. overshadowed the volume gains
in France. Pricing had a 5.0% positive impact on sales growth while
foreign exchange negatively impacted sales by 3.0%. On an organic
basis, sales rose 2.0% from the year-ago quarter.
Operating profit increased 4% to $145 million. Furthermore, the
operating profit margin increased to 27.3%, primarily due to a rise
in gross profit margin, which is offset by an increase in selling,
general and administrative expenses, as a percentage of net sales.
Other Financial Details
Colgate-Palmolive ended second-quarter 2012 with cash and cash
equivalents of $995 million, total debt of $5,363 million and
shareholders' equity of $2,306 million. Net cash provided by
operating activities came in at $1,193 million for the six months
ended June 30, 2012.
Looking ahead, Colgate-Palmolive expects to register double-digit
earnings per share growth for fiscal 2012, excluding the impact of
foreign currency translation. Assuming average currency rates at
current spot prices, the company expects currency translation to
reduce fiscal 2012 earnings per share growth by 6% to 7%.
Colgate-Palmolive competes with
Procter & Gamble Company
Church & Dwight Company Inc.
). The company retains a Zacks #3 Rank, which translates into a
short-term Hold rating. Our long-term recommendation on the stock