Colgate-Palmolive Revenue Falls on Currency Challenges

By Anne Steele 

Colgate-Palmolive Co.'s revenue slid more than expected in the most recent quarter, as foreign currency headwinds dragged down results, particularly in Latin America.

The company, which makes its namesake toothpaste and dish soap, does most of business abroad and has struggled with the stronger U.S. dollar, making products more expensive to overseas consumers.

Chief Executive Ian Cook pointed to strong organic sales growth "in the face of continued challenging macroeconomic conditions worldwide."

However, he said macroeconomic conditions and foreign-exchange volatility remain challenging looking ahead, and the company expects a low- to mid-single-digit sales decline for the year. The company continues to expect adjusted per-share earnings to be flat with 2015.

In all for the June quarter, Colgate earned $600 million, or 67 cents a share, up from $574 million, or 63 cents a share, a year earlier. Excluding certain items, earnings were flat at 70 cents a share, just above analysts' expectations for 69 cents a share, according to Thomson Reuters.

Revenue fell 5.4% to $3.85 billion in the quarter, just below analysts' estimates for $3.86 billion. Stripping out currency fluctuations, acquisitions, divestments and the impact of the deconsolidation of Colgate's Venezuelan operations, the top line grew 4.5% organically.

Sales in Latin America -- which make up nearly a quarter of the company's revenue -- fell 17%, sales in Asia Pacific were down 7%, and sales in Africa/Eurasia slipped 6%. Sales rose 2% in North America and edged up 0.5% in Europe.

Gross margin widened to 59.9% from 58.2%.

Shares, inactive premarket, have risen 10% this year.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

July 28, 2016 08:25 ET (12:25 GMT)

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