Consumer products company Colgate-Palmolive (NYSE: CL – $65.96) reported results for the fourth quarter that beat the Street view on earnings per share by a penny despite revenues that missed projections. The company reported adjusted net income of $655 million, or $0.73 per share, down from $699 million, or $0.76 per share, in the prior year period but topping analyst estimates of $0.72. The results excluded a charge of $1.06 billion, or $1.18 per share, from a change in accounting on Venezuelan operations and $55 million, or $0.06 per share, from the implementation of a restructuring program and a competition law matter in Australia. Total revenues of $3.90 billion were down from $4.22 billion in 2014’s final quarter and missed analyst projections of $3.93 billion. Excluding special items in both periods, gross profit margin was 59.0% in the fourth quarter of 2015, an increase of 20 basis points versus the year ago quarter, as cost savings from the company’s funding-the-growth initiatives and the 2012 restructuring program and higher pricing, were partially offset by higher costs, which included higher raw and packaging material costs, driven by significant foreign exchange transactions. For the full year 2015, worldwide net sales were $16.034 billion, a decrease of 7.0% versus full year 2014. Global unit volume grew 1.5%, pricing increased 3.0% and foreign exchange was negative 11.5%.
Despite the disappointing sales news, conservative investors should keep their positions. In the short-term, they will be rewarded by dividend hikes (52 consecutive years) and likely continued share repurchases. Over the long pull, double-digit earnings from the global oral leader (which also has strong positions in other household and pet care areas) may materialize beyond 2017, when a restructuring program is completed.