Colgate-Palmolive Swings to a Loss as Sales Fall
January 29 2016 - 8:20AM
Dow Jones News
By Lisa Beilfuss
Colgate-Palmolive Co. swung to a loss in its latest quarter as
the consumer-products company took hits from an accounting change
and the strong U.S. dollar.
Macroeconomic conditions and foreign exchange volatility remain
challenging, Chief Executive Ian Cook said Friday, adding that
Colgate sees a low single-digit decline in earnings per share this
year. Analysts have been expecting adjusted earnings this year to
rise to $2.94 a share from $2.81 in 2015.
The maker of its namesake toothpaste, Palmolive dishsoap and
Lady Speed Stick deodorant said during the fourth quarter it
changed the way it accounts for its Venezuelan operations in the
face of "a significant decrease in the availability of U.S. dollars
together with other government controls that the Company expects to
continue for the foreseeable future." The move resulted in a charge
of $1.18 a share in the fourth quarter.
The New York company does most of its business abroad, and a
strong dollar has made products more expensive to customers paying
in foreign currencies. The impact of adverse exchange rates lopped
11.5% off its top line in the fourth quarter. Stripping out
currency fluctuations, sales rose across the company's geographic
segments.
Amid continuing dollar pressure, Colgate has raised prices in
recent quarters in an attempt to support profit. The company lifted
prices 4% in the December period. In addition to raising prices,
the company has moved to cut costs and brought overhead expenses
down 10% in the December quarter. Colgate managed to lift its gross
profit margin to 58.8% from 58.6% a year earlier.
Overall, Colgate reported a loss of $458 million, or 51 cents a
share, down from a profit of $628 million, or 68 cents, a year
earlier. Excluding the aforementioned accounting change, among
other items, Colgate reported 73 cents in earnings a share, down
from 76 cents a year earlier.
Revenue declined 7.6% to $3.90 billion. Analysts projected 72
cents in adjusted earnings a share and $3.93 billion in sales,
according to Thomson Reuters.
Shares in the company, down 5.5% over the past three months
through Thursday's close, were inactive premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
January 29, 2016 08:05 ET (13:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Colgate Palmolive (NYSE:CL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Colgate Palmolive (NYSE:CL)
Historical Stock Chart
From Apr 2023 to Apr 2024