Summary
Colgate-Palmolive Company (CL) reported a strong second quarter and first half of 2011, demonstrating robust sales growth driven by both volume and pricing across its global operations. The company saw a significant increase in net sales, rising 9.5% for the quarter and 7% for the first half, fueled by a healthy 3% volume growth and positive foreign exchange impacts, particularly in Latin America and Greater Asia/Africa. Despite rising commodity costs impacting gross profit margins, Colgate-Palmolive effectively managed operating expenses, leading to an increase in operating profit for the quarter and a significant year-over-year improvement for the six-month period, largely due to the absence of a one-time charge from the prior year related to Venezuelan hyperinflationary accounting. A key strategic move during the quarter was the acquisition of the Sanex personal care business from Unilever for $960 million, aimed at strengthening Colgate's European personal care portfolio. This acquisition, financed through a combination of cash, asset sales, and commercial paper, is expected to be accretive to earnings. The company also continued its commitment to shareholder returns, increasing its annualized dividend and actively engaging in share repurchases. While facing challenges such as increased competition and rising commodity costs, Colgate-Palmolive remains focused on its strategic initiatives to drive brand engagement, innovation, and efficiency, positioning it for sustained long-term growth.
Financial Highlights
49 data points| Revenue | $4.18B |
| Cost of Revenue | $1.78B |
| Gross Profit | $2.40B |
| SG&A Expenses | $1.42B |
| Operating Income | $968.00M |
| Net Income | $622.00M |
| EPS (Basic) | $0.64 |
| EPS (Diluted) | $0.63 |
| Shares Outstanding (Basic) | 979.00M |
| Shares Outstanding (Diluted) | 986.60M |
Key Highlights
- 1Colgate-Palmolive reported a 9.5% increase in net sales for the second quarter of 2011, reaching $4,185 million, driven by a 3% volume increase, 0.5% pricing, and 6.0% favorable foreign exchange.
- 2The acquisition of the Sanex personal care business from Unilever for $960 million was completed on June 20, 2011, aimed at strengthening the company's European personal care offerings.
- 3Diluted earnings per share (EPS) for the second quarter increased to $1.26 from $1.17 in the prior year period, indicating improved profitability.
- 4Operating profit for the second quarter rose by 2% to $968 million, demonstrating the company's ability to manage costs despite increased commodity prices.
- 5The Latin America segment showed particularly strong performance, with net sales increasing 17.0% and organic sales growing 10.5% in the second quarter.
- 6The company's effective tax rate for the first half of 2011 was 32.5%, lower than the 36.3% in the prior year, partly due to the absence of the Venezuelan hyperinflationary accounting charge.
- 7Colgate-Palmolive increased its annualized common stock dividend by 12% to $2.27 per share in the second quarter of 2011, underscoring its commitment to shareholder returns.