Colgate-Palmolive Co.ended the year all smiles after fourth-quarter profit surged to a record high of $631 million, or $1.21 a share, a 27% increase over the year-earlier period.
The New York-based company consumer-products giant attributed the increase to market-share gains in dental products, including toothbrushes and toothpaste, and higher prices, the company said in a Jan. 28 earnings statement. Colgate's market share for global toothpaste grew to 45.1% and increased to 31% for manual toothbrushes, up 0.6 share points from the year-earlier period, said Ian Cook, president and CEO.
In the United States new product launches contributed to market-share gains in several categories, including toothbrushes, body washes and liquid cleaners. Colgate's manual toothbrush market share reached a record 32.2% in the year-end quarter, up 5.2 share points. The results include the introduction of the company's Wisp mini-brush.
Other new products contributing to growth include new body washes and dish liquids, including Softsoap Body Butter Coconut Scrub and Ajax Lime with bleach alternative.
Sales in Latin America grew 22.5%, the largest regional gain for the company. In Brazil the company's toothpaste market share reached 70%.
For the year, net income reached $2.29 billion, or $4.37 a share, up from $1.96, or $3.66 a share, in 2008. Cook says he expects another strong year with additional planned product introductions for 2010.
At A Glance
Colgate Palmolive Co.
New York, N.Y.
Primary Industry: Chemicals
Number of Employees: 36,600
2008 In Review
Revenue: $15.33 billion
Profit Margin: 12.77%
Sales Turnover: 1.54
Inventory Turnover: 5.66
Revenue Growth: 11.17%
Return On Assets: 19.36%
Return On Equity: 85.61%
On Jan. 8 the Venezuelan government announced it would devalue its currency and move to a two-tier exchange structure that separates "essential goods" from "nonessential goods." The exchange rate moved the Venezuelan bolivar to 4.30 from 2.15 per U.S. dollar, with the exception of goods deemed essential, which will exchange at 2.6 per dollar.
Colgate's products are considered nonessential goods under the new classification, the company said. Colgate expects to receive a one-time gain of approximately $60 million, or 12 cents a share, in the first quarter from lower taxes related to unpaid remittances from Venezuela and balance sheet adjustments. But the company estimates it will incur ongoing charges of 4 to 6 cents per share each quarter related to its financial statement changes in Venezuela at the new exchange rate.
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