Earnings: Colgate-Palmolive | Boeing | Pepsi | Anheuser-Busch | ConocoPhillips

Colgate Posts Higher Profit

CHICAGO (Reuters) - Colgate-Palmolive Co. (CL) posted a higher first-quarter profit Wednesday, as volume growth in every operating division helped offset restructuring costs and increased spending on advertising.

The company also said it still expects to post double digit earnings-per-share growth this year, excluding charges for restructuring and stock compensation, despite rising energy costs.

Profit in the first quarter rose to $324.5 million, or 59 cents per share, including charges for restructuring and stock-based compensation, up from $300.1 million, or 53 cents per share, a year earlier.

Excluding those charges, Colgate earned $383.4 million, or 70 cents per share, up from $344.7 million, or 61 cents per share, a year earlier.

Excluding just the 2 cents per share charge related to stock-based compensation, New York-based Colgate earned 68 cents per share, topping the average analyst forecast of 66 cents per share, according to Reuters Estimates.

Sales rose nearly 5 percent to $2.87 billion, topping the average analyst forecast of $2.84 billion. Worldwide advertising spending rose 11 percent to $297.1 million, as every unit raised advertising spending as a percent to sales.

The company's gross margin excluding restructuring charges rose 110 basis points to 56.3 percent, a new record. On a reported basis, gross profit margin was 54.5 percent. Gross margin is watched closely by Colgate and its investors.

"This is especially impressive in light of the adverse commodity environment" in the consumer products sector, SunTrust Robinson Humphrey analyst Bill Chappell said of the gross margin performance. "We had expected steady (gross margin) improvement in 2006, but the (first quarter) performance is well ahead of our expectations."

Chappell has a "buy" rating on Colgate's shares, which closed at $57.35 Tuesday.

Colgate, which also makes Palmolive cleansers and Hill's Science Diet pet food, unveiled a restructuring plan in late 2004 that includes cutting 12 percent of its work force and closing one-third of its factories. The company has also been raising prices on some products to help offset higher costs for raw materials such as resins.

The company is now focused on its more profitable businesses, such as oral care and personal care. It plans to add high-end toothpaste and personal products to its lineup with a deal to buy an 84 percent stake in natural personal products maker Tom's of Maine, set to close later this year. Colgate has also taken steps to exit other areas, such as certain laundry detergent operations.

Colgate trades at 20.1 times this year's estimated earnings, while Kimberly-Clark Corp. (KMB), another consumer products maker in the midst of its own restructuring, trades at about 15 times its estimated 2006 profit, according to Reuters data.

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Boeing Profit Up 29 Percent

NEW YORK (Reuters) - Boeing Co. (BA) said Wednesday that first-quarter profit rose a greater-than-expected 29 percent, as the No. 1 U.S. aerospace company recorded higher sales of its commercial planes.

Boeing, which dominates the surging world market for jetliners with Europe's Airbus, reported quarterly profit increased to $692 million, or 88 cents per share, from $535 million, or 66 cents per share, in the year-ago quarter.

Excluding a one-time gain from a tax settlement, Boeing reported 85 cents per share profit. That beat Wall Street's estimate of 76 cents per share.

Revenue rose 12 percent to $14.3 billion, below analysts' forecast of $14.6 billion.

Boeing reaffirmed its full-year 2006 and 2007 profit forecasts.

Pepsi Beats Expectations

NEW YORK (Reuters) - PepsiCo Inc. (PEP) on Wednesday posted better-than-expected earnings as strong sales of Gatorade sports drinks, Aquafina water and Sun Chips snacks, offset the impact of higher energy and ingredient costs and a late Easter holiday.

The world's No. 2 soft drink company also said it was on track to meet its full-year earnings target.

PepsiCo said earnings rose 9.6 percent to $1 billion, or 60 cents a share, from $912 million, or 53 cents a share, a year earlier. Wall Street, on average, expected earnings of 58 cents a share, according to Reuters Estimates.

Besides strong revenue growth, the food and beverage company said earnings-per-share growth was bolstered partly by a $50 million pre-tax gain from the sale of shares in Pepsi Bottling Group Inc., the largest bottler of Pepsi drinks.

The company, whose products range from Pepsi Cola, Gatorade, Frito-Lay snacks and Quaker cereals, said revenue rose 9 percent to $7.2 billion from $6.6 billion a year earlier. The average Reuters revenue estimate was $7 billion.

"Even with the challenges of higher energy costs, they exceeded Wall Street expectations and affirmed guidance for the full year," said Peter Schofield, a portfolio manager at KnottCapital, which owns about 450,000 Pepsi shares. "It shows the strength and balance of their overall portfolio."

While overall snacks volume rose 4 percent during the quarter, beverage volume jumped 9 percent.

NONCARB BOOST, OVERSEAS GAINS

Soft drink companies have been seeking more consumers who have moved away from sugary soft drinks to diet versions, or to healthier low- or no-calorie beverages like water and orange juices with reduced sugar.

The Pepsi Beverages North America unit saw 5 percent volume growth, helped by double-digit gains in Gatorade, Aquafina and Propel fitness water. Volume sales of carbonated soft drinks declined 1 percent.

Sales volumes at Frito-Lay North America, the company's largest division, rose 2 percent during the quarter, driven by growth in its Sun Chips, Tostitos and Cheetos brands that offset declines in the Doritos brand.

PepsiCo International, which includes all of PepsiCo's business outside the U.S. and Canada, posted 16 percent beverage volume growth led by gains in China, the Middle East, Argentina, India and Venezuela. Snacks volume grew 7 percent boosted by the United Kingdom, Turkey and Russia.

Looking ahead, PepsiCo affirmed 2006 earnings of at least $2.93 a share.

Last week, Coca-Cola Co. (KO), the world's biggest soft-drink maker, posted a 10 percent rise in quarterly profit boosted by its PowerAde sports drink and Dasani bottled water brands and strong growth in China, Russia and Turkey.

So far in 2006, PepsiCo's stock has fallen nearly 3 percent and trades at 19.5 times expected 2006 earnings, while Coke shares have risen about 3 percent, with a price-to-earnings ratio of 18.

Anheuser Busch Beats Views

NEW YORK, April 26 (Reuters) - Anheuser-Busch Cos. Inc. (BUD), the largest U.S. brewer, on Wednesday reported higher-than-expected earnings, helped by U.S. beer volume growth and moderate price increases, sending its shares up 3 percent.

The company, which brews brands including Budweiser and Michelob, posted earnings of $499.2 million, or 64 cents a share, compared with $500.4 million, or 64 cents a share, a year earlier. Still, the earnings per share came in 8 cents above Wall Street expectations.

The company said first-quarter net sales rose to $3.76 billion from $3.56 billion a year earlier.

Analysts, on average, had forecast earnings of 56 cents a share on revenue of $3.63 billion, according to Reuters Estimates.

Total beer volume rose 10.9 percent, with volume in the company's key U.S. market rising 4.6 percent.

The U.S. beer industry has suffered in recent years as consumer tastes have shifted toward cocktails and wine, forcing Anheuser-Buschto offer multiple discounts to try to drive volume higher.

But last October the company said it planned to reverse its price cuts in a bid to generate stronger revenue growth.

ConocoPhillips 1Q Profit Rises 13 Percent

DALLAS - ConocoPhillips (COP), the nation's third-largest oil and gas producer, said Wednesday profit rose 13 percent as stronger exploration and production results yielded the best first-quarter earnings since Phillips Petroleum Co. and Conoco Inc. combined in 2002.

Net income jumped to $3.29 billion, or $2.34 per share for the January-March period, from $2.91 billion, or $2.05 per share, in the year-earlier period. Those results were in line with analysts' expectations, according to Thomson Financial.

ConocoPhillips is the first of the three largest U.S. oil companies to report earnings this week. Exxon Mobil Corp. (XOM) reports Thursday and Chevron Corp. (CVX) on Friday. The three were expected this week to report a total of more than $16 billion in first-quarter profits.

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