Colgate Brushes Off Charges

The New York-based toothpaste company made $284 million, or 51 cents a share, compared with the year-ago $343 million, or 62 cents a share. Excluding restructuring charges, earnings rose 10% from a year ago to 74 cents a share, 2 cents better than the Thomson Financial analyst consensus estimate. Sales rose to $3.01 billion from $2.84 billion a year earlier, beating the $2.96 billion Thomson forecast. Worldwide sales and unit volume, as reported including divestments, grew 6.0% and 4.0%, respectively. Excluding divestments, worldwide sales and unit volume grew 8.5% and 6.5%, respectively, on top of 8.0% volume growth in the year ago quarter. Global pricing increased 1.5% and foreign exchange added 0.5%. Record advertising spending increased absolutely and as a percentage of sales. Gross profit margin was 54.2%. Excluding restructuring charges, gross profit margin was 56.1%, a second quarter record and a 100 basis point improvement versus the year ago period. “Our core businesses are robust, with our oral care sales growing 12% worldwide, led by double-digit growth in North America, Latin America and Greater Asia,” said chief executive officer Reuben Mark. “Looking ahead, we expect our gross profit margin, before restructuring charges, to be up nicely for the year as a result of our ongoing cost-savings initiatives, improved pricing, restructuring and promotional savings,” Mark added. “All this adds to our confidence that Colgate will deliver good quality double-digit E.P.S. growth for this year, excluding restructuring and stock compensation charges, and for 2007 as well.”