Colgate-Palmolive profit drops 16 percent as Venezuelan bolivar pinches
(Reuters) - Colgate-Palmolive Co (CL.N) reported a 16 percent drop in quarterly profit, hurt by a one-time charge related to the fall in value of the Venezuelan bolivar.
The devaluation of the Venezuelan currency has hurt many companies including Ford Motor Co (F.N), Procter & Gamble Co (PG.N) and Mondelez International Inc (MDLZ.O), the maker of Cadbury and Oreo, as it reduces the value of sales in the Latin American country.
Colgate, which controls nearly 45 percent of the global toothpaste market, booked an after-tax charge of $174 million due to changes in Venezuela's foreign exchange, lower than its February estimate of $180 million-$200 million.
The company said it expects such charges to continue, hurting earnings by about 3 cents per share per quarter during 2014. Latin America is the company's biggest market by sales.
Procter & Gamble, the maker of Pampers diapers and Tide detergent, said on Wednesday its quarterly earnings were hurt by 10 cents per share due to the changes in Venezuela.
Colgate's net profit fell to $388 million, or 42 cents per share, in the quarter ended March 31, from $460 million, or 48 cents per share, a year earlier.
Excluding items, the maker of Colgate toothpaste earned 68 cents per share, in line with analysts' average estimate.
Sales rose marginally to $4.33 billion, slightly above the average analyst estimate of $4.32 billion, according to Thomson Reuters I/B/E/S.
Organic sales, which strip out the impact of acquisitions, divestitures and foreign exchange, increased 6.5 percent, helped by strong sales in emerging markets. Organic sales in emerging markets rose 10 percent in the quarter.
Mondelez said on Tuesday it would have to readjust its balance sheet to reflect the bolivar's devaluation resulting in a charge of $140 million in the quarter ended March 31.
Ford reported a 39 percent drop in quarterly profit on Friday, as it had to readjust its balance sheet for currency devaluations in Venezuela.
Colgate's shares closed at $66.43 on the New York Stock Exchange on Thursday. The stock has risen about 12.7 percent in the year to Thursday's close.
(Reporting by Siddharth Cavale in Bangalore and Phil Wahba in New York; Editing by Saumyadeb Chakrabarty and Don Sebastian)
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