), one of the leading global consumer product manufacturers, is
scheduled to report its first-quarter 2012 financial results on
Thursday, April 26, 2012, before the market opens. The current
Zacks Consensus Estimate for the quarter is earnings of $1.24 a
share. For the quarter under review, revenue is expected to be
$4,168 million, according to the Zacks Consensus Estimate.
Colgate has consistently beaten or met the Zacks Consensus
Estimate in the recent past. A flashback of the trailing four
quarters points to an average earnings surprise of 0.8%, with the
company beating the Zacks estimate in the last quarter and meeting
estimates in the prior three quarters.
Fourth-Quarter 2011, a synopsis
Colgate-Palmolive posted fourth-quarter 2011 adjusted earnings
of $1.30 per share, beating the Zacks Consensus Estimate by a
penny. Adjusted earnings also surpassed the prior-year quarter
level of $1.24 per share by approximately 5%.
Global net sales increased nearly 5% year over year to $4,172
million based on a 3% surge in pricing and 4% upside in global unit
volume, partially offset by a 2% negative impact from foreign
exchange. On an organic basis (excluding foreign exchange,
acquisitions and divestitures), sales increased 6% in the quarter.
Global net sales, however, missed the Zacks Consensus Revenue
Estimate of $4,215 million.
The analyst covered by Zacks expects Colgate-Palmolive to post
first-quarter 2012 earnings of $1.24 a share, higher than $1.16
delivered in the prior-year quarter. Currently, the Zacks Consensus
earnings estimate ranges between $1.17 and $1.29 a share.
Agreement of Estimate
For the first quarter of fiscal 2012, of the 19 analysts
covering the stock, 4 analysts revised their estimates upwards,
while 2 analysts revised in the opposite direction in the last 30
days. Similarly, for fiscal 2012, 4 out of 21 analysts made
positive revisions while 2 analysts made negative revisions in the
last 30 days.
In the last 7 days, 2 analysts revised their estimates in the
positive direction for the first quarter and 1 analyst moved in the
opposite direction. For fiscal 2012, 1 analyst each moved their
estimates upwards and downwards in the last 7 days.
Magnitude of Estimate Revisions
Despite positive and negative estimate revision by analysts in
the last 7 and 30 days, the Zacks Consensus Estimates remained
stagnant at $1.24 for the first quarter and $5.39 per share for
Looking ahead, Colgate anticipates a growth of 4% - 7% in global
unit volume and gross margin expansion of 75 to 125 basis points
for fiscal 2012. The company expects to combat the situation of
higher material costs and promotional investments by emphasizing on
innovations for developing new products regionally while boosting
its top line.
Additionally, we believe Colgate-Palmolive's continued focus on
innovation and development of new products will facilitate it in
enhancing its customer base while increasing market share.
Moreover, the company is focusing on acquiring businesses, which
have the potential to generate higher top-line growth and margin.
We believe the company's recent acquisition and divestment
transactions will provide a cushion to its bottom line.
However, Colgate-Palmolive operates in an intensely competitive
environment. The resurgence of archrival
Procter & Gamble Company
) has signaled new challenges. Global competitive conditions have
also intensified, and Colgate is facing strong competition in
China, Russia, India, Hong Kong, Brazil and Mexico.
Currently, Colgate-Palmolive maintains a Zacks #3 Rank, which
translates into a short-term Hold recommendation. Our long-term
recommendation on the stock remains Neutral.
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