Church and Dwight, Inc.

Church and Dwight, Inc. (CHD - Snapshot Report) has surprised and beaten analyst estimates in each of the last four quarters, highlighting the company's ability to grow its earnings in a very challenging market.

Company Description

Church and Dwight Co. Inc., together with its subsidiaries, develops and manufactures personal care and specialty products for households in the United States and internationally. The company owns such well-known products as Arm & Hammer laundry detergent and baking powder and has a market cap of $3.76 billion.

Second-Quarter Results

Church and Dwight posted impressive second-quarter results on Aug 4, driven by increased sales, new products and higher prices. Revenue was up 9% from last year to $594 million. Profit jumped to $45.8 million from $40.5 million last year, producing earnings of 66 cents per share, ahead of analyst estimates by three cents.

Consistent Results

This was the fourth time in the last four quarters that the company has outpaced analyst estimates, having done so by an average of 7 cents, or 12.48%.

Gross Margin Improvement

Church and Dwight reported that its gross margin improved to 40.8% from 39.7% through cost cuts and higher prices, helping it to offset higher commodity costs.

Free Cash Flow and Debt

Due to their strong operational results, Church and Dwight was able to strengthen its financial standing. For the first six months of the year, it generated $113.7 million in free cash flow, up from $49.7 million in the same period last year.

This has enable the company to pay down its debt load, which now stands at $484 million compares to $606 million at the end of 2007.

Guidance and Estimates

After the solid quarter Church and Dwight lifter their full-year guidance to $2.83 to $2.85 from $2.77 earlier in the year.

The analyst community is bullish on the company as well, with the next-year estimate pegged at $3.25 per share, a 14% earnings growth projection.

The Chart

Shares of CHD have been resilient in 2008, recently surging higher after dropping on overall market weakness. Stocks from the consumer staples sector have been holding up fairly well compares to other companies, making them an attractive destination for investors fleeing volatility in other areas of the market. Take a look at the chart below.

Read the full analyst report on CHD