Consumer goods giant Colgate-Palmolive Co. (CL) Friday reported a decline in the third-quarter profit, amid flat sales and lower margins. Organic sales grew 3.5 percent, with growth across all operating divisions. Adjusted earnings matched analysts' estimates.
For 2014, the company anticipates another year of solid organic sales growth.
"Given the recent deterioration in exchange rates, we now expect gross margin may be flat for the year and expect diluted earnings per share to grow 3% to 4% on a dollar basis, based on current spot rates," said Ian Cook, chairman, president and chief executive officer.
Earlier, Colgate-Palmolive had said it expects gross margin expansion, with adjusted earnings per share projected to grow 4 to 5 percent on a dollar basis.
The company also stated that its long-term goal of double-digit annual earnings per share growth on a dollar basis remains unchanged.
For the third quarter, net income attributable to the company declined to $542 million or $0.59 per share from $656 million or $0.70 per share in the previous year. Excluding certain items, adjusted earnings for the recent quarter were $0.76 per share, while the firm posted $0.73 per share last year.
On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $0.76 per share for the quarter. Analysts' estimates typically exclude special items.
The New York-based consumer goods major recorded worldwide net sales of $4.38 billion, a 0.5 percent decrease from $4.4 billion last year. Eighteen analysts estimated revenues of $4.44 billion.
Global unit volume grew 2 percent, and pricing increased 1.5 percent from last year. Foreign exchange was negative 4 percent.
Organic sales, or net sales excluding foreign exchange, acquisitions and divestments, rose 3.5 percent. Organic sales grew 4.5 percent in emerging markets.
In North America, net sales increased 2 percent, while sales decreased 4.5 percent in Latin America. Net sales in Europe/South Pacific edged up 0.5 percent.
Gross profit margin was 58.4 percent, compared to 58.8 in the prior year. Operating profit margin was 21.6 percent, lower than 23.1 percent a year earlier.
The company noted that the implementation of the 2012 restructuring program is still expected to be substantially completed by December 31, 2016.
CL closed Thursday's trading at $65.05. In the pre-market activity, the shares are down 2.38 percent.
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