Colgate-Palmolive Earnings: Margin Expansion Boosted by Rising Revenue, Net Income UP

S&P 500 (NYSE:SPY) component Colgate-Palmolive Co. (NYSE:CL) reported its results for the second quarter. Colgate Palmolive manufactures and markets a number of oral, personal, home care, and pet nutrition products for customers around the world.

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Colgate-Palmolive Co. Earnings Cheat Sheet

Results: Net income for Colgate-Palmolive Co. rose to $627 million ($1.30 per share) vs. $622 million ($1.26 per share) in the same quarter a year earlier. This marks a rise of 0.8% from the year-earlier quarter.

Revenue: Rose 2% to $4.27 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Colgate-Palmolive Co. fell short of the mean analyst estimate of $1.33 per share. Analysts were expecting revenue of $4.27 billion.

Quoting Management: Ian Cook, Chairman, President and Chief Executive Officer, commented on the results and outlook, “We are very pleased that our top and bottom line growth momentum continued this quarter, with net sales, gross profit, operating profit, net income and diluted earnings per share all increasing versus year ago.”

Key Stats:

Revenue has increased for four quarters in a row. Revenue increased 5.2% to $4.2 billion in the first quarter. The figure rose 4.9% in the fourth quarter of the last fiscal year from the year earlier and climbed 11.2% in the third quarter of the last fiscal year from the year-ago quarter.

The company fell short of estimates last quarter after being in line with expectations the quarter before with net income of $1.24.

Margins were up in the first quarter, following a drop in the previous quarter. Gross margin grew 0.2 percentage point from the year-earlier quarter to 57.7%. In the fourth quarter of the last fiscal year, the figure rose 0.3 percentage point to 58% from the year earlier quarter.

The company has now seen net income rise in two straight quarters. In the first quarter, net income rose 3% from the year earlier.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the third quarter has moved down from $1.41 a share to $1.39 over the last sixty days. The average estimate for the fiscal year is now $5.37 per share, down from $5.41 sixty days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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