The low demand of Colgate in the international market, particularly in Brazil and China has resulted a 17% fall in Colgate Palmolive Co. profits. The third quarter reports has revealed that the company has experienced major decline in the revenue over the last four of the six quarters. The situation worsened when the profits fell two per cent below the previous sales on this past Friday. As opposed to the company’s expectation of 4-5% annual profit per share growth, the profits are likely to slow to 3-4% owing to the current strength of the dollar. This comes at a time when United State companies having large International operations were reaping huge benefits due to the weaker value of the dollar. As such, they will be forced to relocate their businesses if they are to continue enjoying favorable benefits.
The sales of this product that dominates nearly 45% of the toothpaste industry has been declining steadily with Latin America registering up to 4.5% drop in sales in the last financial quarter ending Sept 30. The net income fell to $542 million up from $656 million registered in one year before. The reduction in value of sales is said to have been grossly affected by the recently experienced rise in the value of the dollar. The trend is evident even in the global market with low sales registered worldwide. As a result the net sales this financial year have hugely declined to $4.38 billion, something that doesn’t auger well with the management. Nevertheless, the organic sales shot up by 3.5%; without the inclusion of acquisitions, foreign exchange and divestitures expenditures.
On average, the company has been estimated to receive 76 cents on every share as revealed by analysts. This last Friday witnessed the shares of the company close at $65.05 on the New York Stock Exchange having lost 4.5% for the last three months.
