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Colgate-Palmolive Company (CL): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

Posted
1/31/2014 7:00:00 AM
By: Zacks.com
Referenced Stocks:CL

Summary:
Colgate-Palmolive commands a market-leading position in oral care and personal care product categories. We believe that the company's continued focus on product innovation, along with globally recognized brands and presence in both developed and emerging economies facilitate the exploitation of growth opportunities and consequently boosts its profitability. This is evident from the company's first-quarter 2014 results wherein adjusted earnings per share came in at $0.68, up 3% year over year and in line with the Zacks Consensus Estimate. However, we maintain our long-term Neutral recommendation on the stock as lingering macroeconomic concerns in Venezuela and Argentina may negatively impact its financials. In addition, intense competition and a sluggish economic recovery may undermine the company's performance.

Overview:

New York City-based Colgate-Palmolive Co. is a global consumer products manufacturer with a distribution network spanning across more than 200 countries. The company is the world leader in oral care products and one of the leading manufacturers of personal care products. The company follows a closely defined business strategy to increase its leadership positions in key product categories. The product categories are further prioritized based on their capacity to utilize the company's core competencies and strong global equities at optimal levels in order to deliver sustainable long-term growth. Colgate-Palmolive operates through two business segments: (1) Oral, Personal and Home Care and (2) Pet Nutrition.

Oral, Personal and Home Care: The company's portfolio of oral care products include toothpaste (Colgate, Total), toothbrushes (Actibrush, Navigator), and other offerings, such as dental floss and tooth whiteners (Simply White). Personal care items include deodorants (Speed Stick, Mennen), shampoos (Thermal Spa gel, Naturals), soaps (Irish Spring, SoftSoap), and other offerings, such as Colgate shaving cream. Moreover, in 2011, the company added Sanex brand to its portfolio. The brand has a distinct positioning around healthy skin with a strong market share in Western Europe. Household products include dishwashing detergents (Palmolive), cleaners (Ajax, Fabuloso), and fabric care products (Ajax, Fab).

Pet Nutrition: The pet nutrition segment consists of pet food products for dogs and cats manufactured by Colgate-Palmolive's subsidiary, Hill's Pet Nutrition (Hill's Science Diet and Hill's Prescription Diet). The pet products are sold to veterinarians and specialty pet retailers in over 95 countries.

Given below is the graphical presentation of first-quarter 2014 revenue segment on the basis of product offerings as well as region-wise revenues of the Oral, Personal and Home Care segments.


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