Colgate profit meets Wall Street expectations
(Reuters) - Colgate-Palmolive Co's (CL.N) first-quarter profit matched Wall Street's expectations on Thursday, as the toothpaste maker raised prices and spent more to advertise new products while cutting other costs.
February's devaluation of the Venezuelan bolivar led Colgate to take a hefty charge for the quarter and to plan for additional charges later in the year. For U.S. companies that do business in the country, the devaluation means their earnings in bolivars are now worth less when converted back to dollars.
Excluding after-tax charges of $111 million from Venezuela and $55 million from restructuring, Colgate said it had earned $626 million, or $1.32 per share, matching the analysts' average forecast, according to Thomson Reuters I/B/E/S.
On a net basis, Colgate's first-quarter profit fell to $460 million, or 97 cents per share, from $593 million, or $1.23 per share, a year earlier.
Sales rose 2.5 percent to $4.32 billion, topping the analysts' forecast of $4.29 billion. The volume of goods sold rose 4 percent, and pricing was up 1.5 percent.
Organic sales, which strip out the effects of foreign exchange fluctuations, acquisitions and divestitures, rose 6 percent.
Sales in Latin America, Colgate's biggest market, were up 1 percent on a net basis and 9 percent on an organic basis.
The company said 5.5 percent sales growth in North America was aided by new products such as Colgate Optic White toothpastes and mouthwash and new varieties of Softsoap body washes.
In February, Venezuela devalued the bolivar by 32 percent, requiring Colgate to re-measure its balance sheet at the new rate. The New York-based company had already warned the revaluation would cut earnings by as much as 7 cents per share per quarter. On Thursday, it said it still expected the impact of the currency devaluation to be 5 cents to 7 cents per quarter.
Colgate affirmed its forecast of 2013 earnings-per-share growth of 5.5 percent to 6.5 percent on a dollar basis.
(Reporting by Jessica Wohl in Chicago; Editing by Jeffrey Benkoe and Lisa Von Ahn)