Summary
Colgate-Palmolive Company reported first-quarter 2013 results showing a modest increase in net sales, driven by volume growth, though this was partially offset by negative foreign exchange impacts. The company faced significant headwinds, most notably a one-time charge of $172 million due to the devaluation of the Venezuelan bolivar, which materially impacted net income and earnings per share. Despite these challenges, the company is progressing with its 'Global Growth and Efficiency Program,' initiated in late 2012, which involves substantial restructuring charges but is expected to yield significant long-term savings and efficiency gains. While overall profitability declined year-over-year on a reported basis, management highlights that on a non-GAAP basis, excluding the Venezuela devaluation charge and restructuring costs, net income and earnings per share actually increased, indicating underlying operational strength. The company's strategic focus remains on its core Oral, Personal, and Home Care, and Pet Nutrition segments, with a strong emphasis on innovation and market leadership in emerging markets. Colgate-Palmolive also announced a two-for-one stock split, signaling confidence in future performance and aiming to increase shareholder accessibility.
Financial Highlights
49 data points| Revenue | $4.32B |
| Cost of Revenue | $1.80B |
| Gross Profit | $2.52B |
| SG&A Expenses | $1.54B |
| Operating Income | $742.00M |
| Net Income | $460.00M |
| EPS (Basic) | $0.49 |
| EPS (Diluted) | $0.48 |
| Shares Outstanding (Basic) | 936.60M |
| Shares Outstanding (Diluted) | 945.00M |
Key Highlights
- 1Net sales increased by 2.5% to $4.315 billion, driven by a 4.0% volume increase, partially offset by a 3.0% negative foreign exchange impact.
- 2Diluted EPS decreased to $0.97 from $1.23 in the prior year, significantly impacted by a $172 million pre-tax charge ($111 million after-tax) due to the devaluation of the Venezuelan currency.
- 3The company incurred $66 million in pre-tax charges related to the ongoing 2012 Global Growth and Efficiency Program, impacting operating profit and net income.
- 4Excluding the Venezuela devaluation charge and restructuring costs, non-GAAP net income attributable to Colgate-Palmolive increased by 4% to $626 million, and diluted EPS grew by 6% to $1.32.
- 5Operating profit margin declined to 17.2% from 22.3%, largely due to the aforementioned one-time charges and restructuring costs.
- 6The company announced a two-for-one stock split, to be effected as a 100% stock dividend, with a record date of April 23, 2013.
- 7Net cash provided by operations increased by 17% to $777 million, demonstrating strong operational cash generation despite the reported profitability decline.