Colgate-Palmolive 4Q profit up nearly 20 percent

Colgate-Palmolive fourth quarter earnings rise on gains from cost-cutting, higher prices

NEW YORK (AP) -- Consumer products company Colgate-Palmolive Co. reported Thursday that its fourth quarter profit jumped nearly 20 percent, helped by cost-cutting, higher prices and new products.

Shares in the maker of Colgate toothpaste, Irish Spring soap and other personal-care products rose 4 percent to $66.46 in midmorning trading after the company said it is "comfortable" with Wall Street analysts' forecast for its 2009 profit.

Analysts polled by Thomson Reuters expect a profit of $4.23 per share for the year, 9 percent more than in the company's fiscal 2008, which ended Dec. 31.

Colgate-Palmolive's fourth-quarter profit rose to $497 million, or 94 cents per share, from $414.9 million, or 77 cents per share, a year earlier.

Excluding restructuring charges, it earned $1 per share. That topped analysts' average earnings estimate of 98 cents per share. Analysts' estimates typically exclude one-time items.

Standard & Poor's analyst Loran Braverman maintained a strong buy recommendation and an $80 price target on the stock, praising the company's reduction of operating expenses and a 13 percent sales gain in the pet food business. Colgate sells Hill's Science Diet pet food.

Quarterly sales edged up to $3.66 billion from $3.64 billion a year earlier, weighed down by the strengthening dollar. The company raised prices by 7.5 percent worldwide.

The company said new products boosted sales in North America. Successful launches included Colgate 360 Sonic Power battery toothbrush, Irish Spring Moisture Blast, Irish Spring Reviving Mint body wash, Palmolive Pure & Clear dish liquid and Softsoap brand Body Butter Coconut Scrub moisturizing body wash.

Meanwhile, the company cut overhead costs by 90 basis points to 33 percent of revenue in the quarter. That is the biggest reduction in three years.

Chief Executive Ian Cook said falling commodity costs should help the company in the first half of 2009.

"This, coupled with higher pricing and our ongoing aggressive savings programs, should offset the expected impact of the stronger dollar and indicates that gross profit margin for full year 2009 should be up nicely versus 2008," Cook said in a statement.

Roughly 80 percent of the company's sales are outside of North America, so a stronger dollar would hurt results by dampening revenue as foreign currencies are converted.

"Overall, despite the global economic slowdown, we are comfortable with external profit expectations for the first quarter and full year 2009," he said.

Profit for all of 2008 rose 13 percent to $1.96 billion, or $3.66 per share, from $1.74 billion, or $3.20 per share, in 2007. Revenue rose 11 percent to $15.33 billion from $13.79 billion, helped by volume growth, higher prices and favorable exchange rates.

Excluding one-time restructuring charges, the company earned $3.87 per share, beating a Wall Street estimate.

Analysts, who typically exclude one-time charges, had expected $3.85 per share and $15.38 billion in revenue.