Colgate-Palmolive Slides After Revenue Miss in 'Challenging' Third Quarter
Bloomberg News
Colgate-Palmolive (CL) - Get Report posted weaker-than-expected third quarter sales Friday as international activity, especially in Latin America, slowed thanks in part to rising prices and a stronger U.S. dollar.
Colgate said earnings for the three months ending in September came in at 60 cents per share, falling 13% from the same period last year but matched the consensus forecast of 72 cents once cost cuts and tax changes are added to the bottom line. Group sales, the company said, fell 3.2% to $3.845 billion, missing Street estimates while unit volume was essentially flat from the same period. Latin American sales, Colgate said, fell 15%, pulling operating profit in the region down 27% to $222 million.
"The third quarter was a challenging one with category growth rates remaining soft in many markets and unfavorable movements in foreign exchange," said CEO Ian Cook. "While the pricing environment remains difficult given competitive and retailer dynamics, we are pleased we delivered positive pricing this quarter, which partially offset higher commodity and logistics costs."
Colgate shares fell 5.2% to $60.61 each at the opening bell, a move extends the stock's year-to-date decline close to 20% and value the New York, NY-based group at just under $50 billion.
Colgate said the overall sales decrease was linked to market volatility in Brazil and trade inventory reductions in China, and that it sees a low single-digit percentage decline in 2018 sales due to foreign exchange rates as well as lower gross profit margins.
The U.S. dollar index, which tracks the greenback against a basket of six global currency peers, rose 0.7% over the three months ending in September and 1.33% against the European single currency. It traded a two-month high of 96.85 in early dealing Friday, taking its year-to-date advance past 5%.
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