) - a global dealer in consumer goods - came up with
fourth-quarter 2012 adjusted earnings of $1.41 per share,
approximately 8.5% above the year-ago quarter's adjusted earnings
of $1.30. Moreover, quarterly earnings came ahead of the Zacks
Consensus Estimate of $1.40 per share.
Global sales of $4,286 million inched up nearly 2.7% from the
prior-year quarter's level of $4,172 million, primarily
benefiting from a 2.5% upside in pricing and 1.5% increase in
global unit volumes (excluding divested businesses), partially
offset by a negative impact of 1.5% from foreign exchange.
However, quarterly revenue remained below the Zacks Consensus
Estimate of $4,309 million. On an organic basis (excluding
foreign exchange, acquisitions and divestitures), the company
recorded sales growth of 4%.
Adjusted gross profit margin expanded 90 basis points (bps) to
58.6%, 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 increased
manufacturing costs in Venezuela. Selling, general and
administrative expenses, as a percentage of revenue, grew 10 bps
to 34.6% on account of a rise in overhead costs, partially offset
by reduced advertising expenses.
Fourth-quarter adjusted operating profit of $1,035 million
climbed 6% compared to the year-ago period, while operating
margin expanded 80 bps to 24.1%. On a reported basis, including
costs associated with Global Growth and Efficiency Program and
the sale of land in Mexico, operating profit inched up 2% to $942
Colgate-Palmolive's market share of global toothpaste and
manual toothbrushes reached 44.6% and 32.7%, respectively. Global
toothpaste and manual toothbrushes share represented an increase
of 0.5 and 0.8 share points from the year-ago period.
sales (18% of total sales) increased 4.0% in the quarter. The
growth was primarily driven by a 2.0% upside in prices, a 1.5%
rise in unit volume and 0.5% positive impact from foreign
currency translation. On an organic basis, sales increased
Segment operating profit surged 23.0% to $236 million, while
operating margin expanded nearly 460 bps to 30.0%. The
year-over-year increase in operating profit margin was primarily
driven by increased gross profit margin and reduced selling,
general and administrative expenses as a percentage of net
sales (29% of total sales) were up 1.5% year over year primarily
driven by a 5.0% increase in pricing, partially offset by 1.5%
decline in volume and negative foreign exchange impact of 2.0%.
Volume gains were most prominent in Brazil and Central America,
but were weak in Venezuela. On an organic basis, sales increased
However, operating profit declined 4.0% to $348 million from
the prior-year quarter. Moreover, operating margin expanded 170
bps to 28.5%, primarily due to lower gross profit margin and
increased selling, general and administrative expenses as a
percentage of sales.
sales (20% of total sales) were flat year over year, as the
benefit coming from 2.5% increase in unit volume was fully offset
by a decline of 1.0% in pricing and 1.5% negative impact on from
foreign currency exchange. Volume gains were primarily led by
better performance in Australia, Denmark and France, while
volumes in Germany and Iberia declined. Organic sales for the
region were up by 1.5%.
Operating profit increased 14% year over year to $187 million.
Furthermore, the operating profit margin in the region expanded
270 bps to 22.1%, driven by higher gross profit margin and lower
SG&A expenses as a percentage of sales.
sales (20% of total sales) climbed 9.0%, with an 8.0% increase in
unit volume, primarily led by volume gains in India, the greater
China, Russia, the Philippines and South Africa. Pricing
contributed 2.0% to growth, which was partially offset by a 1.0%
negative impact from foreign currency. On an organic basis, sales
Operating profit jumped 6% to $215 million on account of
improved gross profit, while operating margin contracted 80 bps
to 24.7%. Higher SG&A expenses as a percentage of sales more
than offset the benefit of improved gross profit margin.
Hill's Pet Nutrition
sales (13% of total sales) inched down 1.0%. Unit volume
decreased 2.5% as volume declines in the U.S., Japan and Europe
overshadowed the volume gains in Brazil and South Africa. Pricing
had a 2.5% positive impact on sales growth, while foreign
exchange negatively impacted sales by 1.0%. On an organic basis,
sales grew marginally by 1.5% from the year-ago quarter.
Operating profit inched down 2.0% to $149 million. However,
the operating profit margin contracted 30 bps to 26.7%, since the
rise in gross profit margin was more than offset by an increase
in selling, general and administrative expenses, as a percentage
of net sales.
Other Financial Details
Colgate-Palmolive ended fiscal 2012 with cash and cash
equivalents of $884 million, total debt of $5,230 million and
shareholders' equity of $2,189 million. Net cash provided by
operating activities came in at $3,196 million for the
Looking ahead, Colgate-Palmolive anticipates that growth
momentum will continue in fiscal 2013 with gross margin expansion
and a double-digit growth in earnings per share.
Other Stocks to Consider
Colgate-Palmolive carries a Zacks Rank #2 (Buy). Other stocks
in the same industry that are worth considering include
Inter Perfums Inc.
Proctor & Gamble Company
Church & Dwight Company Inc.
). Inter Perfums carries a Zacks Rank #1 (Stong Buy), while the
other two carry a Zacks Rank #2 (Buy).
CHURCH & DWIGHT (CHD): Free Stock Analysis
COLGATE PALMOLI (CL): Free Stock Analysis
INTER PARFUMS (IPAR): Free Stock Analysis
PROCTER & GAMBL (PG): Free Stock Analysis
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