Colgate-Palmolive Co. Earnings Cheat Sheet: Profit Rises for Second Straight Quarter

S&P 500 (NYSE:SPY) component Colgate-Palmolive Co. (NYSE:CL) reported its results for the second quarter. Colgate Palmolive Company manufactures and markets a number of oral, personal, home care and pet nutrition products for customers around the world.

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Colgate-Palmolive Earnings Cheat Sheet for the Second Quarter

Results: Net income for Colgate-Palmolive Co. rose to $622 million ($1.26 per share) vs. $603 million ($1.17 per share) in the same quarter a year earlier. This marks a rise of 3.2% from the year earlier quarter.

Revenue: Rose 9.7% to $4.18 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CL fell in line with the mean analyst estimate of $1.26 per share. Analysts were expecting revenue of $4.17 billion.

Quoting Management: Ian Cook, Chairman, President and Chief Executive Officer commented, “We are pleased with our solid top and bottom line growth this quarter with worldwide net sales, operating profit, net income and diluted earnings per share all increasing versus year ago, despite very sharp increases in material costs, an intense competitive environment globally and challenging macroeconomic conditions, particularly in developed markets.”

“Pleasingly, organic sales worldwide grew 3.5% during the quarter, driven by unit volume increases across all operating divisions and a return to positive pricing on a global basis.”

“Colgate’s global market shares in toothpaste and manual toothbrushes are both at record highs year to date. Colgate’s share of the global toothpaste market strengthened to 44.6% year to date, up 0.4 share points versus year ago. Our global leadership in manual toothbrushes also strengthened during the quarter with Colgate’s global market share in that category reaching 31.9% year to date, up 0.7 share points versus year ago.”

“Advertising spending increased both absolutely and as a percent to sales versus the year ago quarter, and we continue to plan for higher levels of spending in the second half of the year versus the first, in support of a very full pipeline of new products.”

“Reflecting the significantly higher cost environment, we continue to expect gross profit margin for the year to decline between 80 and 100 basis points versus 2010. We continue to be sharply focused on our aggressive funding-the-growth initiatives and anticipate that the benefits from those programs combined with our strategic worldwide pricing efforts will help us achieve our profit target of mid-single digit earnings per share growth for the year, excluding the previously disclosed charge relating to the transition to hyperinflationary accounting in Venezuela in first quarter 2010.”

Key Stats:

Gross margin shrank 1.3 percentage points to 57.4%. The contraction appeared to be driven by increased costs, which rose 13.3% from the year earlier quarter while revenue rose 9.7%.

The company has now fallen in line with estimates for the past two quarters. It reported net income of $1.16 in the first quarter.

Net income has increased 15.1% year over year on average across the last five quarters. The biggest gain came in the first, when income climbed 61.3% from the year earlier quarter.

The company’s revenue has now risen for two straight quarters. In the first quarter, revenue increased 4.3% to $3.99 billion from the year earlier quarter.

Competitors to Watch: The Procter & Gamble Co. (NYSE:PG), Church & Dwight Co., Inc. (NYSE:CHD), The Clorox Company (NYSE:CLX), CCA Industries, Inc. (AMEX:CAW), Unilever plc (NYSE:UL), Avon Products, Inc. (NYSE:AVP), Kimberly-Clark Corporation (NYSE:KMB), PC Group, Inc. (PCGR), and Alberto-Culver Company (NYSE:ACV).

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(Source: Xignite Financials)