Church & Dwight Q2 Profit Up, Results Top Estimates; Backs 2014 EPS Growth View

(RTTNews) - Church & Dwight Co., Inc. (CHD) reported that its second-quarter net income rose to $88.8 million or $0.65 per share, from $86.6 million or $0.61 per share in the same quarter last year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.62 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter grew to $808.3 million from $787.6 million in the prior year quarter. Wall Street expected revenues of $805.85 million. Organic sales growth for second quarter 2014 was 3.0%. These results were driven by volume growth of 3.6%, partially offset by 0.6% negative price/mix.

Looking ahead for the third quarter, the company expects organic sales growth of approximately 3% behind a strengthening consumer business. Gross margin is expected to contract by approximately 150 bps behind higher trade spending, coupon redemptions on our new products and more competitive pricing in the laundry category, as well as negative business mix. The company expects earnings per share of approximately $0.80 - $0.82. Analysts project third-quarter earnings of $0.88 per share.

The company still expects 2014 earnings per share growth to be 7% to 9%, despite unprecedented price competition in the laundry category.

The company continues to expect annual organic sales growth to be approximately 3%. Gross margin is expected to be approximately 75 bps lower than last year (the high-end of its previous 50 to 75 bps outlook) due to higher trade promotions to address the price competition and to support the launch of its new products.

James Craigie, Chairman and Chief Executive Officer said, "We are also pleased with the continued growth of our most recent acquisition, the gummy vitamin business. We achieved double digit consumption growth in the quarter and our sales growth outlook for the full year is approximately 10%, driven by significant distribution gains and adults switching from hard pills to our delicious tasting gummy vitamins."

Wall Street currently is looking for fiscal year 2014 earnings of $3.02 per share on annual revenues of $3.28 billion.