Colgate Beats 4Q15 Earnings Estimates but Misses on Sales Again
Market Realist By Penny Morgan
4 hours ago
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Colgate's 4Q15 Results: Earnings Bring Smiles but Sales Dwindle
Colgate’s 4Q15 financial results
Colgate-Palmolive (CL) released its 4Q15 earnings on January 29, 2016. The quarter ended on December 31, 2015. The company’s reported adjusted diluted EPS (or earnings per share) fell 3.9% to $0.73 per share in 4Q15 compared to $0.76 in 4Q14. Revenue was down 7.5% to $3.9 billion.
However, in 4Q15, Colgate-Palmolive came in ahead of consensus Wall Street analyst estimates on earnings after being in line with the estimates for three quarters in a row. Consensus estimates had projected an adjusted diluted EPS of $0.72.
Diluted EPS
On a currency-neutral basis and excluding the after-tax charges on special items including its 2012 restructuring program, its Venezuela accounting change, and other foreign competition charges, the diluted EPS increased by double digits.
Similarly, Procter & Gamble’s (PG) adjusted EPS fell 1.4% while core adjusted earnings per share increased 9% to $1.04 per share in 4Q15. Excluding the impact of currency exchange headwinds, currency-neutral core EPS increased 21% for the quarter. Adjusted EPS for Kimberly-Clark (KMB) also increased to $1.42 in 4Q15 compared to EPS from continuing operations of $1.35 in 4Q15. Clorox (CLX) is yet to announce its 4Q15 results.
Venezuela operations
During 4Q15, the company announced that it will no longer include the results of its Venezuelan operations in its consolidated financial statements. As a result of this change in accounting, Colgate recorded an after-tax charge of $1.1 billion, or $1.18 per diluted share, in 4Q15. This change reflected a significant decrease in the availability of US dollars and other government controls.
As a result, Colgate expects that the change in accounting for its Venezuelan operation will impact diluted EPS in 2016. The company expects diluted EPS to be negative $0.10 for 2016. Colgate makes up 0.7% of the iShares Global 100 ETF (IOO).
In the next article, we will look at Colgate’s revenue estimates and the components that accounted for the decrease in revenues in 4Q15.
