Colgate-Palmolive Co.'s shares sank Thursday when the consumer products maker posted revenue below expectations and told investors that Venezuela's currency devaluation would drag down full-year results more than expected.
It's the second straight quarter where news about the Latin American country — the company's largest market in the region — has plagued the world's largest toothpaste maker.
During its first quarter, Colgate recorded a hefty charge because its significant business in Venezuela, which earlier this year devalued its currency and moved its Bolivar to a two-tier exchange structure.
Colgate executives said Thursday that Venezuela's country's currency devaluation would drag down full-year profit by 10 cents per share to 15 cents per share. It had previously expected profit to be reduced between 6 cents per share and 10 cents per share.
Elsewhere, though, things looked better for the maker of Palmolive dishwashing liquid, Ajax cleanser and Colgate toothpaste. The company continued to maintain sales of its name-brand products even as shoppers traded down in the weak economy. It is also expanding in developing markets including South America and boosting advertising to keep people spending.
Colgate, based in New York, said Thursday that it earned $603 million, or $1.17 per share, in the three months ending in late June. That's up from $562 million, or $1.07 per share, in the same quarter last year.
Revenue rose almost 2 percent to $3.81 billion, up from $3.75 billion last year.
Analysts surveyed by Thomson Reuters expected the New York company to earn $1.16 per share on revenue of $3.94 billion.
Volume among the company's line of products held up well in the quarter, climbing 3 percent around the world. The outlier again was Hill's pet food division, which accounts for 13 percent of company sales. There, volume fell 4 percent.
Pricing held up well overall, rising a half-percent, but fell in North America and Europe. Some companies have been cutting prices and running promotions to keep people buying, but that means thinner profit margins.
"Overall, we are very pleased to have delivered solid results this quarter, despite heightened competitive activity and difficult economic conditions around the world," Chairman, President and CEO Ian Cook said in a statement.
Colgate shares fell $5.48, or 6.5 percent, to $78.38 in morning trading Thursday.
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