, one of the largest makers of household and personal care products in the world, said Thursday that it exceeded Wall Street's earnings expectations by a penny.
The New York-based maker of Colgate toothpaste, Palmolive dishwashing liquid and Irish Spring soap attributed the better-than-expected earnings to strong company-wide unit volume growth and strong gains in productivity. The company said that every worldwide division's unit volume increased by 6% or more during the quarter, in line with most analysts' expectations.
For the second quarter ended June 30, net income rose to $261.9 million, or 42 cents a diluted share, from $228.1 million, or 36 cents a share, a year earlier. The consensus estimate of analysts polled by
First Call/Thomson Financial
was 41 cents.
The company said revenue rose 2.5% to $2.34 billion from $2.29 billion a year ago and would have increased 7% without the impact of the stronger dollar. Most analysts had expected around a 3% rise in sales, taking into account a 4% negative effect from weakness in currencies such as the euro. Colgate's European sales declined 3% in the quarter, and would have risen 6% without the impact of the euro, the company said. Colgate derives about 21% of its sales from Europe.
"It was a very solid quarter, particularly given the volume growth," said James Dormer, consumer products analyst at
. Dormer said Colgate's biggest upside surprise was lower-than-expected overhead expenditures in the quarter. He rates Colgate a neutral and his firm has not done any underwriting for the company.
Spurred by the introduction of new products, unit volume growth in North America rose 7%, with sales rising 8%, excluding divestments, beating some analysts' forecasts.
analyst Heather Hay Murren, for example, had expected North American sales to be up 6.5%, with volumes up 5.5%. She rates Colgate an intermediate-term neutral and a long-term buy and her firm has not done any underwriting for Colgate.
Colgate said it has already introduced eight of the 19 new products it plans to launch into the market this year, a rise from the 14 new products introduced in 1999 and 12 in 1998.
Shares of Colgate closed up 7/8, or 2%, at 55 3/8.