Colgate-Palmolive (NYSE:CL) stock was up nearly 6% by noon Thursday after the consumer staples giant reported earnings that beat Wall Street's expectations.

The company, which controls nearly half the world's toothpaste business, delivered fourth-quarter profit of $0.68 per share, or $628 million (up from $564 million in the year-ago quarter). Earnings and sales were affected by currency issues. On a currency-neutral adjusted basis, earnings landed at $0.76 per share, only 1% higher on a year-over-year basis, but still higher than Wall Street's estimate of $0.74 per share.

Investors might be surprised the stock is up so much on such a small earnings beat. Add the fact that revenue was down 3.2% in the quarter, and it seems even more surprising. The reason for the advance, however, is that when you strip away the impact of currency, organic sales were much higher.

Colgate-Palmolive is truly an international conglomerate, with only 18% of sales coming from North America, but it collects all of its revenue in the U.S. (where it is based). Therefore, a strong dollar in the short term can make results appear less impressive than they actually are, but what really matters is how much toothpaste and soap the company is selling. On that basis, Colgate reported truly stunning growth for a company of its size, as it increased organic sales -- net sales excluding foreign exchange, acquisitions and divestments -- by a whopping 6%.

Emerging markets lead gains
For the quarter, Colgate's results were driven by market share growth and gains in its international business.

CEO Ian Cook said in a statement: "All operating divisions contributed to the 6% organic sales growth, driven by positive unit volume growth and, in most divisions, higher pricing. Organic sales grew 9.5% in emerging markets, despite economic challenges in certain countries." He added that Colgate's already dominant market share is improving, with toothpaste market share at 44.5% for the quarter, manual toothbrushes at 33.4%, and mouthwash at 16.9%. 

Gross profit margin slipped by less than 1%, due in part to higher packaging costs. But overall it was a surprisingly strong quarter from a company that has been cleaning our teeth since 1806. The stock already offers safety through its massive market capitalization and healthy 2.1% dividend yield, so this type of organic growth should thrill shareholders. 

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