New York-based Colgate-Palmolive Co. (NYSE: CL – $69.86) a producer of oral care, pet food and other consumer goods, raised its projection for charges associated with its cost-cutting plan as it unveiled third quarter results which surpassed analysts’ expectations on revenue. The company, which is overhauling its business, said it would extend the measures to the end of 2019. It now expects that the cost-cutting plan will incur charges of $1.28 billion to $1.38 billion, up from an earlier forecast of $1.12 billion to $1.17 billion. For the third quarter, adjusted net income was $646 million, or $0.73 per share, compared with $653 million, or $0.73 per share, a year earlier and in line with consensus. Revenue rose to $3.97 billion from $3.87 billion a year earlier, with volume growing 1.5% and prices level with a year earlier. Analysts had forecast revenue of $3.94 billion for the quarter. Organic sales growth, which strips out currency swings and the effect of acquisitions and divestments, was an anemic 1.5%. Sales in North America fell 1% in the recent quarter and much of the company’s growth came from outside developed markets, including a 5.5% jump in organic sales in Latin America. Colgate said it’s stepping up advertising costs in an effort to kick-start growth here at home.
Earnings for the full year look to be about $2.90 and $3.13 is what Wall Street is looking for next year. The 2.25% dividend yield is safe and long-term growth lies ahead, albeit at a slower rate. But the high-quality shares still appear to be a good conservative choice on a risk-adjusted bases for now.