Earnings Preview: Colgate-Palmolive Co.
Colgate-Palmolive Co., maker of Palmolive dishwashing liquid, Ajax cleanser and Colgate toothpaste, reports its second quarter results before the market opens Thursday.
WHAT TO WATCH FOR: Colgate-Palmolive has been keeping people buying its name brand products, so strong revenue growth is expected again in the second quarter.
When the economy is weak, people trade down to lower-priced, generic brands but they typically keep buying top-ranked brands of basics like toothpaste and soap. That has meant sales are still strong for Colgate-Palmolive — and this will be something analysts watch for this quarter. They'll also want to see whether the company's level of promotions is diluting the revenue gains.
The company — like many other consumer products makers — is expanding abroad in emerging markets, courting shoppers as they get more disposable income.
But those foreign sales come at a cost, depending on how the dollar fares. A stronger dollar could mean weaker revenue results from overseas, once those sales are converted back to U.S. dollars.
Jefferies & Co. analyst Douglas M. Lane has said that's a concern.
WHY IT MATTERS: Colgate's products are bought by people around the world at many different economic levels. The company's results can show how shoppers feel about the economy.
WHAT'S EXPECTED: Analysts polled by Thomson Reuters expect Colgate to earn $1.16 per share on revenue of $3.94 billion.
LAST YEAR'S QUARTER: Colgate reported net income of $1.07 per share on revenue of $3.75 billion a year ago.