By Jessica Wohl
Oct 24 (Reuters) - Colgate-Palmolive reported slightlyhigher third-quarter earnings on Thursday as it spent more onadvertising and posted strong sales growth in Latin America, yetfailed to show robust growth at home.
Its shares fell 2 percent in morning trading.
The toothpaste maker still expects its annual profit to rise4.5 percent to 5.5 percent, assuming foreign exchange ratesremain fairly stable. It is targeting double-digit earnings-per-share growth for 2014, excluding restructuring charges.
"Colgate continues to execute well on a number of fronts,though this seems to be reflected in the shares," Oppenheimeranalyst Joseph Altobello said.
Growth in the latest quarter met Wall Street's expectationswith some help from a lower-than-anticipated tax rate and stockrepurchases.
Shares of New York-based Colgate were down about 1 percentat $62.86 in morning trading after falling to $61.95.
Its sales rose 1.5 percent to $4.4 billion, short ofanalysts' expectations, while Wall Street's target was $4.46billion, according to Thomson Reuters I/B/E/S. Organic sales,which strip out the impact of acquisitions, divestitures andforeign exchange, were up 6 percent.
In North America, organic sales rose just 1.5 percent, afterrising 5 percent in the second quarter and 2.5 percent in thethird quarter of 2012. Still, North American operating profitjumped 15 percent as the company continued its long-standingcost-cutting program and advertising spending decreased due tothe timing of product launches.
"The slowdown in North American sales raises questions," BMO Capital Markets analyst Connie Maneaty said, adding thatColgate was able to offset operating weakness in Latin America,its largest market, with profit growth in North America andEurope/South Pacific.
In Latin America, which accounts for 29 percent of Colgate'ssales, organic sales rose 9.5 percent, a stronger showing thanin the first two quarters of the year. Operating profit in LatinAmerica declined 5 percent due to higher costs in Venezuela andelsewhere. Business in Venezuela has been hurt by February'sdevaluation of the nation's bolivar.
Advertising spending rose 6 percent from a year earlier, andColgate said it planned to keep spending for the rest of theyear. It is promoting new products such as Colgate Optic Whitetoothpaste and Hill's Prescription Diet Metabolic pet foodaround the world.
Colgate said it had earned $656 million, or 70 cents pershare, up slightly from $654 million, or 68 cents per share, ayear earlier.
Excluding restructuring charges, Colgate earned 73 cents pershare, matching analysts' expectations.
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