Colgate-Palmolive Co. (NYSE: CL – $70.65) posted adjusted third-quarter earnings of $0.73/share, exactly in line with the Street view and a penny better than last year’s third period. On revenues, Colgate reported $3.87 billion, a decrease of 3.5% as compared to a year ago. Global unit volume decreased 4.0%, pricing increased 3.0% and foreign exchange was negative 2.5%. Sales fell below the Street view of $3.94 billion and the $4.0 billion reported a year earlier. Organic sales grew 4.5%, once extraordinary items are excluded. Eliminating charges from the 2012 Restructuring Program in both periods, gross profit margin was 60.4%, an increase of 160 basis points versus the year ago quarter. The increase was primarily driven by cost savings from the company’s “funding- the-growth” initiatives, the 2012 Restructuring Program and higher pricing, partly offset by increases in raw material and packaging costs. Sales were higher in North America and Eurasia, which offset declines in Latin America, Europe and the Asia-Pacific region. Net cash provided by operations year-to-date was $2.317 billion compared to $2.108 billion in the comparable 2015 period,
The oral care, household products and pet foods company believes earnings per share will be mostly flat for 2016 equaling last year’s $2.79. In 2017’s outlook, the company said it continues to see uncertainty in foreign exchange rates, but earnings per share could end at $3.00, thanks to CL’s aggressive stock buyback program. The shares remain a good-quality holding in the consumer staples space, and can be held for gradual price appreciation and a growing dividend, currently yielding 2.2%.