ATE-PALMOLIVE reported slightly higher third-quarter earnings yesterday as it spent more on advertising and posted strong sales growth in Latin America, yet failed to show robust growth at home.
The toothpaste maker still expects its annual profit to rise 4.5 per cent to 5.5 per cent, assuming foreign exchange rates remain fairly stable. It is targeting double-digit earnings-per- share growth for 2014, excluding restructuring charges.
Its sales rose 1.5 per cent to $4.4bn (£2.7bn), short of analysts’ expectations, while Wall Street’s target was $4.46bn. Organic sales, which strip out the impact of acquisitions, divestitures and foreign exchange, were up six per cent. In North America, organic sales rose just 1.5 per cent, after rising five per cent in the second quarter and 2.5 per cent in the third quarter of 2012.
Still, North American operating profit jumped 15 per cent as the company continued its long-standing cost-cutting programme and advertising spending decreased due to the timing of product launches. In Latin America, which accounts for 29 per cent of Colgate’s sales, organic sales rose 9.5 per cent, a stronger showing than in the first two quarters of the year. Operating profit in Latin America declined five per cent due to higher costs in Venezuela and elsewhere. Business in Venezuela has been hurt by February’s devaluation of the nation’s bolivar.
Colgate said it had earned $656m, up slightly from $654m a year earlier.