Colgate-Palmolive Co.: Refreshing News

Feb. 4, 2009
While other manufacturers are reeling from the poor economy, new products boost market share and profit for this consumer products giant.

Colgate-Palmolive Co. executives and shareholders have something to smile about after a quarter that has most U.S. companies puckering their lips.

The company said Jan 29 its fourth-quarter profit rose 20% to $497 million, or 94 cents a share, over the year-earlier period, driven by the introduction of new products, increased prices and cost-cutting initiatives.

Excluding restructuring charges, net income increased 7% in fourth-quarter 2008 to $527.5 million and earnings per share rose 10% to a record $1.

Worldwide sales rose 0.5% during the final three months to an all-time high $3.7 billion, while global pricing increased 7.5%

Colgate-Palmolive Co.
At A Glance

Colgate-Palmolive Co.
New York, N.Y.
Primary Industry: Chemicals
Number of Employees: 36,000
2007 In Review
Revenue: $13.8 billion
Profit Margin: 12.6%
Sales Turnover: 1.36
Inventory Turnover: 5.55
Revenue Growth: 12.68%
Return On Assets: 19.01%
Return On Equity: 123.14%
Some of the newer products that contributed to fourth-quarter gains include Colgate 360 Sonic Power battery toothbrush, Irish Spring Reviving Mint body wash, Palmolive Pure & Clear dish liquid and Softsoap brand Body Butter Coconut Scrub moisturizing body wash.

"A steady stream of new products across categories and at various price points is driving market share gains here in the U.S. and abroad," said president and CEO Ian Cook in a statement.

In 2008, the company's global toothpaste market share was a record 44.8%, led by gains in the United States, Mexico, South America, China, Russia, Germany and Australia. Colgate's market share in manual toothbrushes exceeded 30% for the year.

Looking ahead, the company's positive trend should continue into 2009, according to Cook

"The benefits of recently easing commodity and oil prices should begin to flow through during the first and second quarters of 2009," he said. "This, coupled with higher pricing and our ongoing aggressive savings programs, should offset the expected impact of the stronger dollar and indicates that gross profit margin for full year 2009 should be up nicely versus 2008. Overall, despite the global economic slowdown, we are comfortable with external profit expectations for the first quarter and full year 2009."

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About the Author

Jonathan Katz | Former Managing Editor

Former Managing Editor Jon Katz covered leadership and strategy, tackling subjects such as lean manufacturing leadership, strategy development and deployment, corporate culture, corporate social responsibility, and growth strategies. As well, he provided news and analysis of successful companies in the chemical and energy industries, including oil and gas, renewable and alternative.

Jon worked as an intern for IndustryWeek before serving as a reporter for The Morning Journal and then as an associate editor for Penton Media’s Supply Chain Technology News.

Jon received his bachelor’s degree in Journalism from Kent State University and is a die-hard Cleveland sports fan.

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