Colgate profits up 10% but shares fall
Toothpaste and soap maker Colgate-Palmolive today said quarterly profit rose 10 per cent, but shares fell more than 5 per cent as slowing growth in shipment volume and increased competition in North America caused concern.
Shipment volume growth, which excludes currency and price fluctuations, slowed to 2.5 per cent in the quarter, its lowest level of the year, as the company came up against a tough comparison to a year ago when it started shipping its popular Simply White tooth whitener.
Volume in North America fell 3 per cent, the first volume decline in the region in almost nine years. Overall, more than half of the company's sales gain came from the weakness of the dollar against other currencies, which boosts Colgate's sales when they are converted back to dollars on the company's books.
The company also continued spending to promote new products, the lifeblood of a consumer-products maker. But this spending cut into profit in North America.
The New York-based company posted profit of $365.4 million, or 63 cents a share, compared with $330.7 million, or 57 cents a share, a year ago.
Sales rose 6 per cent to $2.52 billion, matching the average analyst estimate. But sales fell 3.5 percent in North America, compared with a year ago, when the company introduced Simply White.
Operating profit in that region, which accounts for about one-quarter of the company's sales, fell 13 per cent as it invested to promote new products like Palmolive dish wipes and Softsoap aromatherapy body wash.