(Reuters) - Colgate-Palmolive Co (CL.N), which makes toothpaste, soaps and detergents, reported lower-than-expected quarterly sales, hurt by a strong dollar and weak demand for its products in Europe, sending its shares to a 17-month low.
Shares of Colgate, which expects a low single-digit rise in 2017 sales, fell as much as 7 percent to $63.45 in morning trading on Friday.
New York-based Colgate’s organic sales growth of 1.5 percent was mainly driven by a 2.5 percent rise in prices and not due to volume growth, which fell 1 percent, well below the estimate of 4.7 percent growth, Morgan Stanley analyst Dara Mohsenian said in a note.
The company’s quarterly organic sales growth was the weakest since the fourth quarter of 2010, Mohsenian added.
Sales in Europe fell 7.5 percent to $539 million, in the fourth quarter ended Dec. 31, hurt by declining volumes in France. Sales in North America, Colgate’s second-biggest market, rose slightly to $790 million.
“As we look ahead, uncertainty in global markets and foreign exchange volatility remain challenging,” CEO Ian Cook said.
Based on the current exchange rate, Colgate said it expects a low single-digit rise in net sales and earnings per share in 2017.
Net revenue fell nearly 5 percent to $3.72 billion. Analysts on average had expected $3.87 billion, according to Thomson Reuters I/B/E/S.
The company reported net income of $606 million, or 68 cents per share, in the quarter, compared with a loss of $458 million, or 51 cents per share, a year earlier.
Excluding certain items, Colgate earned 75 cents per share, in line with analysts’ average estimate.
Reporting by Gayathree Ganesan in Bengaluru; Editing by Martina D'Couto