Colgate-Palmolive Co. (CL) on Friday reported a nearly 88 percent surge in profit for the fourth quarter from last year, as a decline in sales was more than offset by higher one-time charges in the year-ago period.
Both, revenue and adjusted earnings per share beat analysts’ expectations. Looking ahead, the company projects a decline in earnings for fiscal 2019. The company’s shares are down more than 3 percent in pre-market activity.
“Given our plans to increase investment behind our brands to drive acceleration in organic sales growth, we believe our earnings outlook for 2019 is appropriate,” Ian Cook, Chairman and Chief Executive Officer of Colgate-Palmolive said.
Fourth-quarter net income attributable to the company grew to $606 million or $0.70 per share from $323 million or $0.37 per share in the year-ago period.
The latest quarter’s results included $32 million or $0.04 per share of after-tax charges resulting from the company’s Global Growth and Efficiency Program.
The year-ago quarter’s results included $61 million or $0.07 per share of after-tax charges resulting from the company’s Global Growth and Efficiency Program and a charge of $275 million or $0.31 per share related to the U.S. tax reform.
Excluding charges, adjusted earnings were $0.74 per share, compared to $0.75 per share in the year-ago period. On average, analysts polled by Thomson Reuters expected the company to earn $0.73 per share. Analysts’ estimates typically exclude special items.
Worldwide net sales declined 2.0 percent to $3.81 billion from $3.89 billion in the year-ago period. Analysts had a consensus revenue estimate of $3.77 billion.
Global unit volume for the quarter rose 0.5 percent and pricing increased 2.5 percent, while foreign exchange was negative 5.0 percent. Organic sales grew 2.0 percent.
The company noted that the previously disclosed professional skin care acquisitions contributed 1.0 percent to net sales and unit volume growth in the quarter.
Looking ahead to fiscal 2019, Colgate-Palmolive forecast net sales to be flat to up in low-single-digits and organic sales growth of 2 percent to 4 percent.
The company also said it is planning for a year of gross margin expansion and expects a low-single-digit decline in earnings per share on a reported basis. Excluding charges, Colgate projects a mid-single-digit decline in earnings per share for the full year.
The Street expects the company to earn $3.04 per share for the year on revenues of $15.54 billion.