Colgate-Palmolive ( CL) said Wednesday that second-quarter profit edged 4% higher on solid volume growth in all of its business units. The company, with core consumer goods such as its namesake toothpaste and detergent products, earned $373.9 million, or 66 cents a share, in the quarter ended June 30 vs. $359.8 million, or 62 cents a share, in the year-earlier period. The latest quarter's results included the negative effect of less than a penny a share related to the acquisition of a European oral care company. Analysts had been calling for a profit of 66 cents a share. Shares of New York-based Colgate-Palmolive were moving up 18 cents, or 0.3%, at $56.80 in Wednesday pre-open trading. Global sales in the quarter were up 5.5%, excluding divestments, to $2.57 billion. Global unit volume growth increased 5%, also excluding divestments. Sales in Europe rose 11.5% to $649 million, while unit volume was up 7.5%, excluding divestments. Sales in North America fell 2.5% to $579 million, while unit volume rose slightly. Volume growth was more than 7% in the toothpaste, manual toothbrushes, liquid hand soap, body wash and fabric conditioners categories, the company said. Colgate-Palmolive said U.S. volume is the strongest its seen in three years, excluding its Simply White tooth-whitening gel. The company sees that momentum continuing into 2005. "The current pace of business in the third quarter is strong and national market shares, particularly for toothpaste, are up. Our reinvestment in the U.S. appears to be paying off, which bodes well for U.S. and global results in 2005," the company said in a statement. On the negative side, Colgate-Palmolive noted that 2004 has been a "challenging" year and that it's seen increases in raw and packing material prices.
Gross profit margin in the latest quarter expanded 40 basis points to 55.4% as a percent of sales. Additionally, the company said that it will sell its detergent business in Columbia to main rival Procter & Gamble ( PG). Colgate-Palmolive had previously sold its detergent businesses in Peru and Ecuador to Procter & Gamble. The $15 million gain on the sale was mostly offset by certain restructurings and changes in distribution networks, Colgate-Palmolive said. Colgate's shares were recently down $2.22, or 3.9%, to $54.40. Shares of Procter & Gamble were recently down 98 cents, or 1.8%, to $53.27.