Colgate Shares Climb as 3rd-Quarter Profit Beats Estimates

Colgate-Palmolive reports a jump in net income as the consumer-brands company drives volumes and pricing higher in every division.
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Colgate-Palmolive  (CL) - Get Report shares jumped on Friday after the consumer-goods company reported third-quarter results that surpassed analyst estimates. 

The New York company drove volumes and pricing higher in every division, it said.

Third-quarter net income was $698 million, or 81 cents a share, up 21% from $578 million, or 67 cents, in the year-earlier quarter. The latest adjusted earnings were 79 cents a share. 

Analysts surveyed by FactSet were expecting GAAP earnings of 69 cents a share, or an adjusted 70 cents.

Revenue reached $4.15 billion, up 5.7% from $3.93 billion. The FactSet survey called revenue at $3.99 billion. 

"While we continue to see elevated demand in personal care and home care related to the virus, premium innovation is also driving growth across all of our product categories," Chief Executive Noel Wallace said in a statement. 

"We also continue to see strength in e-commerce, led by our Hill's [pet-food] business."

For the full year, the company expects earnings per share to grow 6% to 7%. 

Colgate-Palmolive expects 2020 net sales and organic sales to both be up mid-single-digits percent. And it expects gross margins to expand as the company increases advertising investment.

In the third period sales rose 6.5% in North America, 17% in Europe and 4.5% in Asia.

North America represented 22% of company sales. 

Latin America, which saw a 5% decline in sales, represented 20% of overall sales. 

Growth accelerated "despite the many challenges brought on by the covid-19 pandemic," Wallace said. 

Colgate shares at last check were 2.2% higher to $78.35.