10-QPeriod: Q3 FY2009

COLGATE PALMOLIVE CO Quarterly Report for Q3 Ended Sep 30, 2009

Filed October 29, 2009For Securities:CL

Summary

Colgate-Palmolive Company (CL) reported solid financial results for the third quarter and the first nine months of 2009, demonstrating resilience in a challenging global economic environment. Net sales for the third quarter were flat year-over-year at $3.998 billion, with organic sales growing a robust 7.0%. Diluted Earnings Per Share (EPS) increased significantly to $1.12 for the quarter, up from $0.94 in the prior year, reflecting improved profitability and effective cost management. The company successfully navigated currency headwinds, particularly the Venezuelan situation, and benefited from lower commodity prices. The completion of the 2004 Restructuring Program is expected to provide ongoing cost savings and support future cash flows. Key drivers of performance included strong volume growth and pricing strategies across various geographic segments, particularly in North America and Latin America. While some regions faced foreign exchange challenges, the company's diversified global presence helped mitigate overall risk. Colgate-Palmolive also continued to return capital to shareholders through increased dividends and share repurchases. The company's focus on core categories, innovation, and operational efficiency positions it for continued performance in the face of persistent global macroeconomic uncertainty.

Financial Highlights

45 data points
Beta

Revenue

$4.00B

59.2% Gross Margin

Net Income

$590.00M

14.8% Net Margin

EPS (Diluted)

$0.56

Total Assets

$11.07B

Cash & Equivalents

$847.00M

Free Cash Flow

$1.16B

Financial Statements
Beta
Revenue$4.00B
Cost of Revenue$1.63B
Gross Profit$2.37B
SG&A Expenses$1.40B
Operating Income$926.00M
Net Income$590.00M
EPS (Basic)$0.58
EPS (Diluted)$0.56
Shares Outstanding (Basic)998.20M
Shares Outstanding (Diluted)1.05B

Key Highlights

  • 1Diluted Earnings Per Share (EPS) rose to $1.12 for Q3 2009, up from $0.94 in Q3 2008, indicating improved profitability.
  • 2Worldwide Net Sales for Q3 2009 were $3.998 billion, flat compared to the prior year, but organic sales grew a strong 7.0%, demonstrating underlying business health.
  • 3Gross profit margin improved to 59.2% in Q3 2009 from 56.1% in Q3 2008, driven by higher pricing and cost savings.
  • 4Operating profit increased by 17% to $926 million in Q3 2009, benefiting from improved gross margins and lower SG&A expenses.
  • 5The company reported strong operating profit growth in North America (+32%) and Latin America (+11%) in Q3 2009.
  • 6Cash provided by operations significantly increased by 34% to $2,375 million for the nine months ended September 30, 2009, reflecting improved profitability and working capital management.
  • 7Colgate-Palmolive maintained a strong balance sheet with $847 million in cash and cash equivalents as of September 30, 2009.

Frequently Asked Questions

For the third quarter of 2009, Colgate-Palmolive reported flat Net sales of $3.998 billion year-over-year, but achieved a robust 7.0% organic sales growth. Diluted Earnings Per Share (EPS) saw a significant increase to $1.12, up from $0.94 in the same period of 2008. Operating profit also grew by 17% to $926 million.

Profitability was driven by several factors, including higher pricing across segments, improved gross profit margins (up to 59.2% in Q3 2009 from 56.1% in Q3 2008), and reduced selling, general, and administrative expenses, particularly lower advertising spend. The completion of the 2004 Restructuring Program also contributed to ongoing cost savings.

Colgate-Palmolive is exposed to foreign currency fluctuations, with a notable impact from Venezuela. The company incurred additional costs related to the remeasurement of U.S. dollar liabilities in Venezuela due to currency exchange control limitations. To manage this exposure, the company has strategically invested in Venezuelan government bonds. Despite these challenges, the company's diversified global operations help to mitigate the overall impact of currency movements.

Colgate-Palmolive is committed to returning value to shareholders. The company increased its annualized common stock dividend in early 2009 and continued its share repurchase program. Net cash provided by operations increased significantly, supporting these capital return initiatives and operational investments.