We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Things You Need to Know Before Colgate's (CL) Q3 Earnings
Read MoreHide Full Article
Colgate-Palmolive Company (CL - Free Report) is scheduled to report third-quarter 2018 numbers on Oct 26, before the opening bell.
Colgate is popular among investors for its meet or beat earnings track record. The company posted in-line earnings in three out of the last four quarters, with an average beat of 0.3%.
Let’s see how things are shaping up prior to this announcement.
What to Expect?
The question lingering in investors’ minds is whether this consumer goods giant will be able to deliver a positive earnings surprise in the third quarter of 2018. The Zacks Consensus Estimate for the quarter under review is pegged at 72 cents, which reflects year-over-year decline of 1.4%. However, estimates moved south by a penny in the last seven days. The Zacks Consensus Estimate for revenues is pegged at $3,877 million, down 2.4% from the year-ago quarter.
Colgate-Palmolive Company Price, Consensus and EPS Surprise
Colgate is progressing well with its Global Growth and Efficiency Program, which focuses on reducing structural costs to improve profitability, standardizing processes to improve decision-making procedure and increasing its market share worldwide. Further, the company is on track with brand building and productivity maximization initiatives.
However, Colgate has been witnessing strained margins due to higher raw material and packaging costs. These factors led to a 140 basis points (bps) contraction in the company’s gross margin while operating margin contracted 80 bps during the second quarter of 2018. Notably, this marks its third straight quarter of negative gross margin and fifth consecutive quarter of operating margin decline. Persistence of such headwinds is likely to weigh upon the company’s profitability in the upcoming quarterly release.
Further, the company’s top-line picture looks unimpressive, thanks to dismal trend in Latin America. We note that during the second quarter, soft volumes in Central America led to decline in net and organic sales for Latin America. The company anticipates the backdrop to remain challenging due to uncertain global markets in the months ahead. It also anticipates foreign exchange to adversely affect net sales in the second half of 2018. Such headwinds are expected to dent Colgate’s top line in the impending quarter. In fact, it is worth pointing out that the company’s top line lagged estimates in 16 out of the last 17 quarters.
What the Zacks Model Unveils
Our proven model does not conclusively show that Colgate is likely to beat earnings estimates this quarter. This is because a stock needs to have — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Colgate currently has a Zacks Rank #4 (Sell) and an Earnings ESP of -0.17%, consequently making surprise prediction difficult.
Stocks With Favorable Combination
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
The Estée Lauder Companies Inc. (EL - Free Report) has an Earnings ESP of +1.35% and a Zacks Rank #3.
Coty Inc. (COTY - Free Report) has an Earnings ESP of +3.05% and a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think.
Image: Bigstock
Things You Need to Know Before Colgate's (CL) Q3 Earnings
Colgate-Palmolive Company (CL - Free Report) is scheduled to report third-quarter 2018 numbers on Oct 26, before the opening bell.
Colgate is popular among investors for its meet or beat earnings track record. The company posted in-line earnings in three out of the last four quarters, with an average beat of 0.3%.
Let’s see how things are shaping up prior to this announcement.
What to Expect?
The question lingering in investors’ minds is whether this consumer goods giant will be able to deliver a positive earnings surprise in the third quarter of 2018. The Zacks Consensus Estimate for the quarter under review is pegged at 72 cents, which reflects year-over-year decline of 1.4%. However, estimates moved south by a penny in the last seven days. The Zacks Consensus Estimate for revenues is pegged at $3,877 million, down 2.4% from the year-ago quarter.
Colgate-Palmolive Company Price, Consensus and EPS Surprise
Colgate-Palmolive Company Price, Consensus and EPS Surprise | Colgate-Palmolive Company Quote
Factors Likely to Influence 3Q18
Colgate is progressing well with its Global Growth and Efficiency Program, which focuses on reducing structural costs to improve profitability, standardizing processes to improve decision-making procedure and increasing its market share worldwide. Further, the company is on track with brand building and productivity maximization initiatives.
However, Colgate has been witnessing strained margins due to higher raw material and packaging costs. These factors led to a 140 basis points (bps) contraction in the company’s gross margin while operating margin contracted 80 bps during the second quarter of 2018. Notably, this marks its third straight quarter of negative gross margin and fifth consecutive quarter of operating margin decline. Persistence of such headwinds is likely to weigh upon the company’s profitability in the upcoming quarterly release.
Further, the company’s top-line picture looks unimpressive, thanks to dismal trend in Latin America. We note that during the second quarter, soft volumes in Central America led to decline in net and organic sales for Latin America. The company anticipates the backdrop to remain challenging due to uncertain global markets in the months ahead. It also anticipates foreign exchange to adversely affect net sales in the second half of 2018. Such headwinds are expected to dent Colgate’s top line in the impending quarter. In fact, it is worth pointing out that the company’s top line lagged estimates in 16 out of the last 17 quarters.
What the Zacks Model Unveils
Our proven model does not conclusively show that Colgate is likely to beat earnings estimates this quarter. This is because a stock needs to have — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Colgate currently has a Zacks Rank #4 (Sell) and an Earnings ESP of -0.17%, consequently making surprise prediction difficult.
Stocks With Favorable Combination
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Monster Beverage Corporation (MNST - Free Report) has an Earnings ESP of +1.37% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Estée Lauder Companies Inc. (EL - Free Report) has an Earnings ESP of +1.35% and a Zacks Rank #3.
Coty Inc. (COTY - Free Report) has an Earnings ESP of +3.05% and a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>