Colgate-Palmolive Company (CL) recently posted better-than-expected first-quarter 2010 results. The quarterly earnings of $1.21 per share outpaced the Zacks Consensus Estimate of $1.15, and rose 24.7% from 97 cents posted in the prior-year quarter.

However, on a reported basis, including one-time items, quarterly earnings came in at 69 cents a share, down 28.9% year-over-year. The stock fell $1.26 or 1.5% to $83.74 in the pre-market trading.

Global net sales grew 9.5% year-over-year to $3,829 million as unit volume increased 6%, and foreign exchange contributed 3.5%. Pricing remained flat compared to the prior-year quarter. On an organic basis (excluding foreign exchange, acquisitions and divestitures), sales increased 6% in the quarter.

Gross profit margin expanded 170 basis points to 59.2% in the quarter under review driven by the fall in raw and packaging material costs, and cost-containment initiatives.

Colgate-Palmolive notified that its share of the global toothpaste market has increased to 44.4%, led by better performance across Mexico, Brazil, China, India, Russia, Venezuela and Greece. Colgate’s market share in manual toothbrushes has increased to 31.5%.

Segment Discussion

North America sales (accounts for 20% of the total sales) climbed 3% in the quarter, driven by a 5% unit volume growth and 1.5% favorable foreign exchange, partially offset by 3.5% on account of lower pricing. On an organic basis, sales rose marginally by 1.5%. Operating profit jumped 13%.

Latin American sales (accounts for 26% of the total sales) climbed 10.5% as unit volume increased 8% driven by solid gains in Brazil, Columbia and Mexico. In addition, pricing contributed 6.5% to the top-line, countered by a negative foreign exchange impact of 4%.

On an organic basis, sales soared 14.5%, whereas operating profit grew 11% during the quarter.

Europe/South Pacific sales (accounts for 22% of the total sales) surged 14.5% as unit volume increased 7% driven by France, Italy, Spain, Denmark, the United Kingdom, Poland and the GABA business. Although pricing was down 3%, foreign exchange made a positive 10.5% contribution. On an organic basis, sales rose 4%, whereas operating profit soared 34% in the quarter.

Greater Asia/Africa sales (accounts for 19% of the total sales) climbed 14.5%, while unit volume surged 9%, led by volume gains in India, the Greater China region, Thailand, the Philippines and Malaysia, partially offset by a volume decline in South Africa. Pricing dropped marginally by 1%, and foreign exchange made a positive 6.5% contribution. On an organic basis, sales grew 8%, whereas operating profit rose 24%.

Hill’s sales (accounts for 13% of the total sales) climbed 2%. However, unit volume fell 2%, due to volume declines across U.S., Japan, Italy, Germany and Turkey, offset by gain in the United Kingdom, Taiwan, Mexico and South Korea. Pricing dropped 0.5% and foreign exchange made a positive 4.5% contribution to the top-line. On an organic basis, sales tumbled 2.5%, whereas operating profit grew 8%.

Financial Aspects

Colgate-Palmolive ended the quarter with cash and cash equivalents of $561 million, total debt of $3,117 million and shareholders’ equity of $2,595 million. Net cash provided by operating activities rose 6% to $733 million, due to efficient working capital management.
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