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Church & Dwight (CHD) 4Q Earnings Rise On Volume Growth, Margin Expansion

 February 05, 2013 09:14 AM

(By Balaseshan) Church & Dwight Co. Inc. (NYSE: CHD) reported better-than-expected quarterly earnings as volume growth drove increase in revenue and margins expanded and the maker of personal care products revised 2013 profit view at the high-end of previous forecast.

Earnings grew to $80.8 million or $0.57 per share for the fourth quarter from $63.8 million or $0.44 per share in the year-ago quarter. Excluding the tax valuation allowance in 2011, earnings per share increased to $0.57 from $0.53.

Net sales rose 10.8 percent to $809.7 million and organic sales gained 4.4 percent helped by 4.3 percent volume growth and the 0.1 percent positive effect of price.

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Wall Street analysts, on average, expected earnings of $0.57 per share on sales growth of 10.10 percent to $805.08 million.

Gross margin expanded 100 basis points to 44.3 percent mainly because of a cat litter price increase, sales growth of higher margin personal care business and a reduction in trade spending, among others.

The company's brands include ARM & HAMMER, TROJAN Condoms, XTRA laundry detergent, OXICLEAN pre-wash laundry additive, FIRST RESPONSE home pregnancy and ovulation test kits, ORAJEL oral analgesics and SPINBRUSH battery-operated toothbrushes.

Sales at the company's Consumer Domestic unit rose 17.3 percent, Consumer International segment went down 6.0 percent, while Specialty Products revenue declined 3.8 percent.

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Looking ahead for the first quarter, Church & Dwight sees earnings per share to increase about 8 percent from last year, while analysts expect 10.60 percent growth.

For the full year 2013, the company now expects earnings per share of $2.79, which is the upper end of prior view of $2.74 to $2.79, while analysts expect $2.79. Organic net sales growth is expected to be 3 percent to 4 percent.

On January 30, the company's board of directors raised its quarterly dividend by 17 percent to $0.28 per share. The dividend will be payable March 1 to stockholders of record at the close of business on February 15.

CHD ended Monday's regular session down 0.15 percent at $58.40. The stock has been trading in the 52-week range between $45.08 and $59.27.



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