Earnings Results Analysis: Colgate-Palmolive Company (NYSE: CL)

On Thursday, Shares of Colgate-Palmolive Company (NYSE: CL) showed the bearish trend with a lower momentum of -0.16% and ended its trading session at $68.86. The company traded total volume of 4,997,389 shares as contrast to its average volume of 3.78M shares. The company has a market value of $60.47B and about 878.20M shares outstanding. During the 52-week trading session, the minimum price at which share price traded was registered at $68.19 and reached the max level of $77.91.

Colgate-Palmolive Company (CL) recently stated worldwide Net sales of $3,892.0M in fourth quarter 2017, a boost of 4.5% as compared to fourth quarter 2016. Global unit volume increased 3.0%, pricing reduced 1.0% and foreign exchange was positive 2.5%. Organic sales (Net sales apart from the impact of foreign exchange, acquisitions and divestments) increased 2.0%.

Net income and Diluted earnings per share in fourth quarter 2017 were $323.0M and $0.37, respectively. Net income in fourth quarter 2017 included $61.0M ($0.07 per diluted share) of aftertax charges resulting from the Company’s Global Growth and Efficiency Program and a provisional charge of $275.0M ($0.31 per diluted share) related to U.S. tax reform.

Net income and Diluted earnings per share in fourth quarter 2016 were $606.0M and $0.68, respectively. Net income in fourth quarter 2016 included $54.0M ($0.06 per diluted share) of aftertax charges resulting from the Global Growth and Efficiency Program and an aftertax charge of $7.0M ($0.01 per diluted share) for a litigation matter.

Operating profit reduced to $924.0M in fourth quarter 2017 contrast to $955.0M in fourth quarter 2016. Operating profit in both periods included charges resulting from the Global Growth and Efficiency Program. Operating profit in fourth quarter 2016 also included a charge for a litigation matter. Apart From these items in both periods, as applicable, Operating profit was $1,011.0M in fourth quarter 2017, a decrease of 3% as compared to fourth quarter 2016. Operating profit margin was 23.7% in fourth quarter 2017 as compared to 25.7% in fourth quarter 2016. Apart From the above noted items in both periods, as applicable, operating profit margin was 26.0% in fourth quarter 2017, a decrease of 190 basis points as compared to the year ago quarter. This decrease in Operating profit margin was mainly because of a boost in Selling, general and administrative expenses as a percentage of Net sales, reflecting increased advertising investment.

Net cash offered by operations year to date reduced to $3,054.0M contrast to $3,141.0M in the comparable 2016 period, mainly because of the timing of income tax payments. Working capital as a percentage of Net sales increased to (2.0) % contrast to (2.2) % in the year ago period, reflecting the Company’s continued tight focus on working capital.

The Company offered net profit margin of 13.10% while its gross profit margin was 60.50%. Beta factor of the company was recorded at 0.78. The stock, as of recent close, has shown the weekly downbeat performance of -0.76% which was maintained at -8.73% in this year.

Louis Jensen

Editor

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