Second-quarter profit of Colgate-Palmolive Co. rose 47 percent as it improved profit margins, cut costs and carved out market share through record spending on advertising.
Chief Executive Ian Cook said he expected double-digit earnings per share growth to continue in the second half of the year. New York-based Colgate-Palmolive sells toothpaste, Palmolive and Irish Spring soaps, Tom's of Maine natural care products, Hill's Science Diet pet food and other brand names.
Net income rose to $415.8 million (EUR302.55 million), or 76 cents per share, compared with a year-earlier profit of $283.6 million (EUR206.36 million), or 51 cents per share. Excluding restructuring charges, net income in the most recent quarter was $457.5 million (EUR332.9 million), or 84 cents per share. Net sales totaled $3.41 billion (EUR2.48 billion), up from $3.01 billion (EUR2.19 billion) a year earlier.
Analysts polled by Thomson Financial on average expected earnings per share of 84 cents in the period on revenue of $3.31 billion (EUR2.41 billion). Analysts typically exclude restructuring costs and other one-time items in profit estimates.
Consumers pressured by high gas prices and declining housing prices seem not to have hurt spending on personal care products.
"We're certainly seeing no slowdown in consumer purchasing," Cook told analysts on a conference call.
Cook said Colgate plans a global launch of its Tom's of Maine products next year. He declined to offer more details about the rollout or which markets the company would enter first.
The company realized share gains in Mexico, Brazil, China, India, France and Russia during the quarter. In China alone, Colgate had a 20 percent rise in volume.
Addressing speculation about Colgate combining with Unilever, Cook said, "There are absolutely no conversations now with Unilever on any M&A activity."
Colgate also increased its share buybacks by 30 percent, a rate the company expects to maintain for the rest of 2007.
Shares of Colgate-Palmolive rose $1.30 to $69.55 early Wednesday afternoon.
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