Back to top

Analyst Blog

Leading consumer products company, Church & Dwight Co. Inc. (CHD - Snapshot Report) posted first-quarter 2013 earnings of 76 cents a share that surpassed the Zacks Consensus Estimate of 72 cents and increased 15.2% from 66 cents earned in the comparable prior-year quarter.

This Zacks Rank #3 (Hold) stock witnessed an improvement of 12.8% in its top line to $779.3 million and surpassed the Zacks Consensus Estimate of $777 million. Organic sales increased 2%, reflecting 2.4% growth in volume, partially offset by negative impact of 0.4% due to pricing and adverse product mix.

In terms of growth in bottom line, Church & Dwight's results fared better than other players in the household products industry. Clorox Corporation (CLX - Analyst Report) came up with lower-than-expected earnings results for the third-quarter of fiscal 2013. The company’s earnings of $1.00 per share missed the Zacks Consensus Estimate of $1.06 and fell nearly 3.8% from the year-ago quarter’s adjusted earnings of $1.04.

Colgate-Palmolive Company (CL - Analyst Report) reported first-quarter 2013 adjusted earnings of $1.32 per share, rising 6% from the year-ago quarter’s adjusted earnings of $1.24 and in line with the Zacks Consensus Estimate.

Coming to Church & Dwight results, gross profit increased 15.7% to $350.1 million compared with $302.5 million in the prior-year quarter. Moreover, gross margin expanded 110 basis points to 44.9%, reflecting operating efficiencies and flat commodity prices.

Operating income escalated 18.6% year over year to 169.3 million during the quarter. Moreover, operating margin expanded approximately 100 basis points to 21.7%.

Segment Details

Consumer Domestic's net sales elevated 15.7% year over year to $591 million, driven by a 42.5% jump in personal care products revenues to $232.3 million coupled with a 3.2% growth in household products revenues to $358.7 million.

Organic sales rose 1.4% during the quarter, reflecting higher sales of ARM & HAMMER liquid laundry detergents and unit dose laundry detergent. Moreover, higher sales of TROJAN products, OXICLEAN laundry additives and FIRST RESPONSE diagnostic kits boosted results. This was, however, partially offset by sluggish sales of KABOOM cleaners and ARM & HAMMER powdered laundry detergent.

Increase in sales represents a 1.8% improvement in volume, while product mix and pricing unfavorably impacted sales by 0.4%.

Consumer International's sales increased 6.5% year over year to $129.3 million. Organic sales increased 5.2% attributable to healthy sales in Australia, UK and Mexico. The rise in organic revenue reflected 6.2% growth in volume, while product mix and pricing unfavorably impacted sales by 1%.

Specialty Products' sales increased marginally to $59 million. Moreover, organic sales inched up 0.8%.The increase reflected favorable contribution from product pricing of 1.2%, while volume decline of 0.4% partially offset the sales growth.

Other Financial Details

Church & Dwight, which competes with Proctor & Gamble Company (PG - Analyst Report), ended the quarter with cash and cash equivalents of $259.6 million, long-term debt of $649.4 million and shareholders’ equity of $2,085.2 million.

During the quarter, the company repurchased 0.9 million shares worth $50 million. Moreover, it generated operating cash flow of $72.3 million and incurred $10.4 million in capital expenditures.

Outlook

Management stood by its earlier guidance and expects innovative product launches to continue boosting organic sales in 2013. The company reiterated organic sales growth in the range of 3%-4%. Church & Dwight forecasts commodity prices to remain stable and expects gross margin to rise by 25 –50 basis points.

Management anticipates earnings per share to be $2.79 for 2013, up 14% year over year. For the second quarter, Church & Dwight expects organic sales growth of 3% to 4% and earnings per share of 58 cents. The current Zacks Consensus Estimates for the second quarter and full year are 72 cents and $2.81.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%