NEW YORK — Colgate-Palmolive Co. (CL) on Thursday said its second-quarter earnings fell on foreign currency exchange rates that battered sales of consumer staples in Latin America, Europe and other markets.
CEO Ian Cook said the company is still targeting double-digit annual earnings, but added "we continue to see significant deterioration in foreign exchange rates." The strong U.S. dollar has pushed up prices for goods sold overseas, which can cut into profits for U.S. companies like Colgate-Palmolive that do most of their business overseas.
Colgate-Palmolive sells manual toothbrushes, powered toothbrushes, toothpaste, mouthwash, body washes and fabric conditioners.
Revenue fell to $4.07 billion from $4.35 billion in the prior-year period, pulled down by lower sales overseas. The company reported that sales fell 8.5 percent in Latin America, where higher packaging costs also pressured profits. Latin America accounts for 27 percent of the company's sales. Sales in Europe and the South Pacific also fell 16.5 percent. Those two regions generally make up about 18 percent of total company sales.
Shares of Colgate fell 88 cents, or 1.28 percent, to $68.04 in midday trading.
On a per-share basis, the New York-based company said it had net income of 63 cents. Earnings, adjusted for non-recurring costs, were 70 cents per share.
The results did not meet Wall Street expectations. The average estimate of 12 analysts surveyed by Zacks Investment Research was for earnings of 71 cents per share.
Colgate-Palmolive shares have fallen slightly since the beginning of the year, while the Standard & Poor's 500 index has climbed slightly more than 2 percent. The stock has increased nearly 4 percent in the last 12 months.
Keywords: Colgate-Palmolive, Earnings Report