Colgate-Palmolive Falls After Sales Fall Short of Analysts' Projections
Colgate-Palmolive Co., the world’s largest toothpaste maker, fell the most in almost six years after sales missed analysts’ estimates and the company said Venezuela’s currency devaluation would further cut 2010 profit.
Colgate dropped $5.74, or 6.8 percent, to $78.12 at 4:15 p.m. in New York Stock Exchange composite trading, the most since September 2004. The shares have fallen 4.9 percent this year.
“Sales and gross margin were somewhat disappointing and reflecting both a competitive operating environment and the impact of foreign exchange,” Joseph Altobello, an analyst at Oppenheimer & Co., wrote in a note today.
Colgate, which makes Palmolive dish liquid and Hill’s Pet Food, has expanded in emerging markets to boost growth. That’s also increased exposure to foreign exchange fluctuations, and the company said today that devaluation of Venezuela’s currency would cut full-year profit by up to 15 cents a share, instead of the ceiling of 10 cents previously announced.
Second-quarter net income rose 7.3 percent to $603 million, or $1.17 a share, in line with the $1.17 average of 21 analysts’ estimates compiled by Bloomberg. Sales rose 1.8 percent to $3.81 billion compared with a $3.94 billion estimate.
Countries such as India, China and South Africa pushed second-quarter volume up 11.5 percent for the greater Asia/Africa division. North America sales increased 4.5 percent, while volume rose 5 percent, helped by new products such as Colgate Max White with Mini Bright Strips toothpastes.
(Colgate will hold a conference call at 11 a.m. To listen, visit http://www.colgate.com.</a></a>)
To contact the reporter on this story: Lauren Coleman-Lochner in New York at llochner@bloomberg.net.
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