), a global dealer in consumer goods, reported second-quarter 2014
adjusted earnings of 73 cents per share which came in line with the
Zacks Consensus Estimate. Earnings grew 4% year over year.
Colgate-Palmolive Company - Earnings Surprise |
Including one-time items, earnings came in at 67 cents per
share, up 12% year over year.
Global sales of $4,352 million were almost flat as compared with
the prior-year figure of $4,346 million. Sales benefited from 2.5%
growth in volume and 1.5% rise in prices which were run down by a
4% negative impact from currency fluctuations. However, quarterly
revenues missed the Zacks Consensus Estimate of $4,401 million.
On an organic basis (excluding foreign exchange, acquisitions and
divestitures), the company recorded sales growth of 4%.
Adjusted gross profit margin was 58.8%, up 20 bps as the benefit
from cost saving initiatives under funding-the-growth and 2012
Restructuring Program as well as higher pricing more than offset
increase in raw material and packaging costs.
Adjusted selling, general and administrative (SG&A) expenses,
as a percentage of revenues, fell 40 basis points (bps) to 34.4%
from the year-ago quarter. The decline was mainly due to lower
advertising investment partly offset by higher overhead expenses
both as a percentage of sales.
In the quarter, adjusted operating profit of $1,056 million
increased 2% from the year-ago period while operating margin
improved 60 bps to 24.3%.
On a year-to-date basis, Colgate-Palmolive's market share of global
toothpaste and manual toothbrushes reached 44.4% and 33.5%,
respectively. Additionally, the company's mouthwash business made
significant progress, with its global market share reaching a
record 17.2% in the year-to-date period, an 80 bps improvement from
the prior-year quarter.
sales (18% of total sales) rose 1% in the quarter, driven by a 2.5%
rise in unit volume, partly offset by the negative impact of 1%
from lower pricing and 0.5% from foreign exchange. On an organic
basis, sales increased 1.5%.
The segment's operating profit grew 2% to $231 million while
operating margin expanded 20 bps to 30%. The year-over-year rise in
operating margin was chiefly due to lower SG&A expenses as a
percentage of net sales, partly offset by a lower gross margin.
sales (27% of total sales) declined 4% year over year, as the
benefit of a 5% increase in pricing and 3% unit volume growth was
more than offset by a negative foreign exchange impact of 12.0%.
Volume gains were most prominent in Venezuela, Mexico and Colombia.
On an organic basis, sales increased 8%.
Operating profit decreased 12% to $311 million while as a
percentage of sales, it contracted 220 bps to 25.3% primarily due
to a lower gross profit margin and higher SG&A expenses as a
percentage of sales.
sales (20% of total sales) grew 6% year over year, primarily
benefiting from a 4.5% rise in unit volume and a 4% positive impact
from foreign exchange. However, these were partially offset by a
2.5% impact from lower pricing. Volume gains were primarily led by
Australia and France. Organic sales for the region were up 2.5%.
Operating profit increased 20% year over year to $227 million.
Furthermore, the operating margin for the region expanded 310 bps
to 26% primarily attributable to higher gross profit margin and
lower SG&A expenses as a percentage of sales.
sales (15% of total sales) fell 1.5% owing to 4.5% negative impact
from foreign currency, which more than offset a 2.5% increase in
unit volume and a 0.5% rise in pricing. Volume growth was primarily
led by gains in India, Thailand and the Philippines. On an organic
basis, sales grew 3%.
Operating profit rose 3% to $178 million. Operating margin expanded
120 bps to 29.2%, on account of lower SG&A expenses as a
percentage of sales.
sales (7% of total sales) also dropped 1% year over year due to a
7.5% negative impact from foreign currency exchange, which more
than offset the benefit of 5.5% growth in unit volume and 1%
increase in prices. Volume gains were primarily led by Russia,
South Africa and Turkey. Organic sales for the region rose 6.5%.
Operating profit decreased 11% year over year to $58 million in the
quarter while as a percentage of sales, it contracted 210 bps to
18.8%. The decrease was mainly due to lower gross profit margin and
increased SG&A expenses as a percentage of sales.
Hill's Pet Nutrition
sales (13% of total sales) grew 2%. Pricing had a 4% positive
impact on sales growth while foreign exchange negatively impacted
sales by 0.5%. Unit volume decreased 1.5% due to volume declines in
the U.S., and Japan, partly offset by volume gains in Russia. On an
organic basis, sales rose 2.5% from the year-ago quarter.
Operating profit improved 7% to $146 million, while operating
profit margin expanded 130 bps to 26.1%. The rise in operating
profit was due to higher gross margin.
Other Financial Details
Colgate-Palmolive, which competes with The Procter & Gamble Co.
) and Unilever plc (
), ended the quarter with cash and cash equivalents of $1,161
million, total debt of $6,061 million and shareholders' equity of
Net cash provided by operating activities came in at $1,389 million
for the first half.
Other Stocks to Consider
Currently, Colgate-Palmolive carries a Zacks Rank #2 (Buy). Another
stock that warrants a look in the retail space is Citi Trends, Inc.
), which sports a Zacks Rank #1 (Strong Buy).
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