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(Sharecast News) - American consumer products giant Colgate-Palmolive beat analysts' estimates with improved second-quarter results, though the stock flatlined after the company delivered a cautious outlook and announced a new restructuring programme.
The firm said it still expects full-year net sales to be up by a low single-digit percentage, held back by foreign exchange movements, and held on to profit guidance.
However, organic sales growth will now be at the "low end of 2% to 4%", including the negative impact from the planned exit from private label pet sales.
Net sales rose 1.0% year-on-year to $5.11bn, with organic sales growth at 1.8%, with a decline in organic sales in North America - which accounts for 20% of total sales - offset by improvements elsewhere and a flat performance in Asia Pacific. The consensus estimate was for a top-line figure closer to $5.04bn.
Operating profits were more or less flat at $1.08bn, though adjusted earnings per share increased 1% to $0.92, beating the $0.90 expected by the market.
Meanwhile, Colgate-Palmolive also announced a new three-year productivity programme, aimed to better align the organisational structure to support strategic initiatives, the company said. Measures include optimising the supply chain to drive efficiencies and streamline the organisational structure to reduce overhead costs.
The cumulative charge of the productivity initiative will be $200m-300m before tax.
"I am pleased that Colgate-Palmolive people achieved another quarter of net sales, organic sales and earnings per share growth in the face of continued difficult market conditions worldwide, with organic sales growth improving sequentially versus the first quarter despite an even greater negative impact from lower private label pet sales," said chair, president and chief executive Noel Wallace.
The stock was down 0.5% at $83.49 by 1133 ET.
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