NEW YORK – Colgate-Palmolive Co. (CL) said on Thursday its quarterly profit fell as the maker of toothpaste and other consumer products took a charge for its restructuring plan and spent more on advertising.
Colgate, which is cutting 12 percent of its work force and closing a third of its factories, said earnings fell to $285.7 million, or 50 cents per share, including $48 million in after-tax charges.
Excluding the restructuring charges, profit fell to $333.7 million, or 59 cents per share, from $372.1 million, or 65 cents, a year earlier.
Analysts, on average, expected New York-based Colgate to earn 59 cents per share, according to Reuters Estimates.
"It was pretty much in line with expectations," said
William Chappell, analyst at SunTrust Robinson Humphrey, who has a "buy" rating on Colgate shares. "Revenue was a little bit better, but we had been seeing that it had pretty positive trends throughout the quarter of volume picking up."
Colgate, whose brands include Ajax and Softsoap (search), said sales rose to $2.8 billion from $2.57 billion a year earlier. Analysts, on average, pegged sales at $2.74 billion, according to Reuters Estimates.
Colgate issued its first earnings warning in nearly a decade in September, due in part to higher costs for raw materials. In December, the company said it would cut about 4,400 jobs and shut some plants as it tries to fight rising costs and focus on higher-profit areas such as oral care.
The company, whose other products include Palmolive cleansers and Hill's pet food (search), said it increased total advertising spending 13 percent in the quarter.
"North America and European volumes were both better than expected," said Chappell. "I think that's just the direct result of their stepped up marketing and advertising efforts."
Colgate said unit volume grew 7 percent in North America, while European unit volume jumped 18.5 percent, excluding divestments. The acquisition of GABA added 9.5 percent to growth in Europe.
The company is optimistic it can reach its profit expectations this year and return to double-digit earnings growth in 2006, Chairman and Chief Executive Reuben Mark said in a statement.