Colgate's higher profit just tops Wall Street expectations
(Reuters) - Colgate-Palmolive Co (CL.N) posted a slightly bigger increase in quarterly profit than Wall Street was expecting on Thursday as it raised prices and used more advertising to entice shoppers to buy its toothpaste and other products.
Colgate, which will cut about 6 percent of its workforce in a restructuring announced in October, said it had earned $598 million, or $1.26 per share, in the fourth quarter, up from $590 million, or $1.21 per share, a year earlier.
Excluding after-tax charges from the restructuring and costs from the sale of land in Mexico, Colgate earned $1.41 per share, topping the analysts' average forecast of $1.40, according to Thomson Reuters I/B/E/S.
Sales rose 2.5 percent to $4.29 billion, missing the analysts' target of $4.31 billion.
Organic sales, which strip out the effects of foreign exchange, acquisitions and divestitures, rose 4 percent. The volume of goods sold increased 1.5 percent, and prices rose 2.5 percent.
In Latin America, Colgate's largest market, sales rose 1.5 percent as volume fell 1.5 percent and prices increased 5 percent.
An increasingly difficult economic and labor environment in Venezuela hurt both volume and gross profit in the region, Colgate said. The company faced labor problems in Venezuela during the quarter, and it said it believed a number of other companies did as well.
Colgate said it expected 2013 earnings to grow at a double-digit rate, excluding factors such as restructuring charges and any major currency devaluations or significant macroeconomic events.
The 2012 restructuring plan, which includes cutting the company's workforce by about 6 percent by the end of 2016, is on track, Colgate said. It plans to take a total of $775 million to $875 million in after-tax restructuring charges and expects to save $275 million to $325 million after tax annually by the fourth year of the plan.
(Reporting by Jessica Wohl in Chicago; Editing by Lisa Von Ahn)
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