* Venezuela accounts for about 5 percent of Colgate's sales
* Sees big impact in 1st quarter, smaller hit later in year
* Colgate: devaluation should not impact financial position
* Shares down modestly in premarket trading
Feb 11 Colgate-Palmolive Co said on
Monday that it expects to incur a one-time loss of $120 million,
or 25 cents per share, in the first quarter of 2013, related to
the devaluation of the Venezuelan currency.
In addition, Colgate expects earnings to be reduced by 5
cents to 7 cents per share per quarter in 2013, due to the
translation of financial statements at the new Venezuelan
Venezuela accounts for about 5 percent of Colgate's total
The devaluation will not have any impact on its 2012
results, or its financial position, the New York-based
toothpaste maker said.
Venezuela devalued its bolivar currency by 32 percent on
Friday in a widely expected move that will shore up government
finances after ailing President Hugo Chavez's blowout
election-year spending in 2012 but will also spur galloping
inflation. It was the country's fifth devaluation in a decade.
Since Jan. 1, 2010, Colgate has designated Venezuela
hyper-inflationary and therefore all foreign currency
fluctuations are recorded in income, the company said.
Monday's announcement comes after Colgate turned in
disappointing fourth-quarter results in Latin America, due
largely to economic and labor problems in Venezuela.
An increasingly difficult economic and labor environment in
Venezuela hurt both volume and gross profit in the fourth
quarter, Colgate said on Jan. 31. The company dealt with a labor
slowdown at its Venezuelan factory during the quarter.
Shares of Colgate slipped 29 cents to $108.20 in premarket