Colgate-Palmolive Co. said its first-quarter earnings fell 16%
as the consumer-products company recorded a charge related to
Venezuela's exchange rate for foreign investments, masking a slight
increase in sales.
All operating divisions contributed to the company's 6.5%
organic sales growth in the quarter, which excludes effects from
foreign exchange, acquisitions and divestments, said Chief
Executive Ian Cook. He also noted that the organic sales growth was
led by the emerging markets, where organic sales grew 10%.
Consumer-products companies have suffered from the devaluation
of emerging-market currencies in the past year, reducing the value
of sales. Unilever PLC, for instance, on Thursday said the
Argentine peso and Russian ruble had been especially weak in the
most recent quarter and said it would raise prices in emerging
markets in an attempt to tackle currency weakness.
Colgate in February had warned it could book one-time losses
between $180 million to $200 million tied to Venezuela's moves
related to the exchange rate for foreign investments. The company
added that it was unclear how Venezuelan law on pricing announced
earlier this year would affect Colgate's pricing strategy in the
region.
The company on Friday said the after-tax charge tied to
Venezuela ended up being a $174 million, or 19 cents a share.
Meanwhile, Colgate has been relaunching its Hill's Science Diet
line of pet food as well as adding new products. Colgate's sales
have improved in recent quarters, but costs for its restructuring
efforts have been a drag on its bottom line of late.
Overall, Colgate reported a profit of $388 million, or 42 cents
a share, down from $460 million, or 48 cents a share, a year
earlier. In addition to the charge tied to Venezuela and foreign
exchange, the latest period included $74 million of after-tax
charges tied to the implementation of the company's global growth
and efficiency programs, and the sale of land in Mexico. Excluding
items, per-share earnings were 68 cents.
Net sales edged up 0.2% to $4.33 billion. Global unit volume
grew 5% as pricing rose 1.5%.
Analysts polled by Thomson Reuters had projected earnings of 68
cents a share and revenue of $4.32 billion.
Gross margin widened slightly to 58.4% from 58.3%. Selling,
general and administrative expenses edged up 0.5%.
Write to Anna Prior at anna.prior@wsj.com
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