Colgate sees 1Q one-time gain, quarterly charges, related to Venezuela’s exchange rate plans
By APMonday, January 11, 2010
Colgate expects future charges from Venezuela move
NEW YORK — Colgate-Palmolive Co. said Monday that it anticipates a first-quarter one-time gain, as well as quarterly charges in 2010, related to Venezuela’s plans to establish a new currency exchange rate.
The New York consumer products company expects a gain of about $60 million, or 12 cents per share in the first quarter because it will see a lower-than-expected tax rate on money already made in Venezuela but not yet translated back into dollars.
After that, it expects charges of 4 cents to 6 cents per share in each quarter of 2010 as money it earns there will translate back into fewer dollars.
Venezuela said Friday that it plans to devalue its currency and move to a two-tier exchange structure, which will likely move the exchange rate for essential goods to 2.60 from 2.15, and nonessential goods and services, which Colgate’s products would likely be under, at 4.30.
Colgate-Palmolive, whose products include Irish Spring soap, Ajax and Palmolive cleaning products and its namesake toothpaste, said it doesn’t expect Venezuela’s plans to impact 2009 financial results.
