Colgate-Palmolive Profit, Revenue Decline Amid Currency Headwinds
April 28 2016 - 7:37AM
Dow Jones News
By Ezequiel Minaya
Colgate-Palmolive Co. on Thursday posted a decline in quarterly
earnings and revenue as foreign exchange headwinds continued to
take a toll on results, especially in Latin America.
The maker of its namesake toothpaste, Palmolive dishsoap and
Lady Speed Stick deodorant does most of its business overseas and
has been hard hit by the strong U.S. dollar, which makes products
more expensive to customers paying in foreign currencies.
"As we look ahead, macroeconomic conditions and foreign exchange
volatility remain challenging," Chief Executive Ian Cook said in
prepared remarks. "Despite that, we anticipate another year of
solid organic sales growth in 2016, driven by a full new product
pipeline across all categories and geographies"
While total sales declined 7.6% to $3.76 billion in the quarter,
the top line grew 5% when stripping out currency fluctuations,
acquisitions, divestments and the impact of the deconsolidation of
the company's Venezuelan operations.
Sales in Latin America logged a sharp 22% decline, while sales
in Europe and the South Pacific fell 7.5%. Asia posted a sales
decrease of 2.5%. Sales in North America climbed 1.5%.
After decades as a steady and solid performer -- between 1994
and 2014, Colgate stock rose by more than 800% -- the company has
hit some bumps. It said in March that it would cut additional jobs
as part of a restructuring program that was originally slated to
end this year.
In all, the company earned $533 million, or 59 cents a share, in
the quarter, down from $542 million, or 59 cents a share, a year
earlier. Excluding certain items, earnings declined 5% to 63 cents
a share.
Analysts surveyed by Thomson Reuters expected earnings of 63
cents a share on $3.8 billion in revenue
Late last month, the company promoted two insiders as part of a
plan to line up an eventual successor to Mr. Cook, who has run the
company for nine years, according to people familiar with the
moves.
P. Justin Skala and Noel R. Wallace are now the front runners to
succeed Mr. Cook, who turns 64 next month and is expected to step
down within the next five years, the people said.
Colgate, historically, has been deliberate in its grooming of
future CEOs. Mr. Cook, who has been with the company for 40 years,
was picked as the likely successor to then Chief Executive Reuben
Mark in 2004, three years before he would assume the role.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
April 28, 2016 08:22 ET (12:22 GMT)
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