NEW YORK – Colgate-Palmolive Co. (CL) on Wednesday said profit fell in the third quarter because of increased marketing spending and higher costs for raw materials.
The maker of Colgate toothpaste and other products also said its board voted to authorize a plan to repurchase 20 million shares between now and the end of 2005.
Colgate (search) said it earned $329 million, or 58 cents per share, compared with $365.4 million, or 63 cents per share, a year earlier.
A month ago, Colgate issued its first formal earnings warning in almost a decade, due in part to higher costs. Since then, analysts lowered their profit outlooks to an average of 58 cents per share from 67 cents before the Sept. 20 announcement, according to Reuters Estimates.
Net sales rose to $2.70 billion from $2.52 billion, in line with analysts' expectations.
The company stood by its fourth-quarter earnings forecast of 57 cents to 59 cents per share.
Analysts also expect a fourth-quarter profit of 57 cents to 59 cents per share, matching the outlook Colgate gave in September, with a mean target of 58 cents, according to Reuters Estimates. That view is down from the average of 68 cents per share analysts had ahead of the company's warning.
Shares of New York-based Colgate closed at $43.06 on Tuesday after hitting a new 12-month low of $42.89.
Colgate shares underperformed the Standard & Poor's household products index during the third quarter. While the index, which includes Colgate and rivals such as Procter & Gamble Co. (PG) fell 4 percent, Colgate tumbled 9.2 percent.
The new stock buyback plan will allow Colgate to repurchase its shares at twice the rate purchased in 2003 and so far this year, it said.