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Colgate hit by downgrade
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September 14, 2000: 1:40 p.m. ET
Shares sink 14% after analyst cuts company's rating, lowers price target
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NEW YORK (CNNfn) - Colgate-Palmolive Co. stock tumbled Thursday after Deutsche Banc Alex. Brown cut its rating and its price target on the consumer goods company.
Shares of Colgate-Palmolive (CL: Research, Estimates), which makes Colgate toothpaste, soap and other home products, fell $7.94, more than 14 percent, to $48.25 in the afternoon.
 Deutsche cut Colgate-Palmolive to "market perform" from "buy" and dropped the price target to $55 from $62.
Deutsche downgraded the stock after conversations with Colgate-Palmolive management indicated petroleum costs and a weak euro will reduce the company's third-quarter earnings by 5 cents a share, according to a copy of the Deutsche report.
Colgate-Palmolive did not issue a press release to the public regarding an earnings warning and calls to the company seeking comment were not returned.
Securities and Exchange Commission Chairman Arthur Levitt has been critical of companies that share information with certain analysts as "a way to gain and maintain favor with particular analysts."
On Aug. 10, the SEC passed Regulation FD, requiring all companies to disclose profit warnings, earnings reports and any other information issued to analysts simultaneously to the public via press releases or other notifications. But that rule does not go into effect until Oct. 9.
Deutsche also said in its report it still expects Colgate-Palmolive to meet its third-quarter target of 43 cents a share, but predicted the "poor earnings quality will signal a reversal of fortune to investors."
Colgate-Palmolive Chairman and CEO Rueben Mark said he was comfortable with analysts' estimates of 43 cents for the third quarter and of $1.69 for fiscal 2000, according to Reuters news service.
Mark said the company expects double-digit earnings-per-share growth for 2000 and 2001.
Deutsche Banc analyst Alex Shore, listed on the report, was unavailable for further comment.
Shares of rival consumer products maker Procter & Gamble (PG: Research, Estimates) also lost ground, falling $1.31 to $61.19. 
-- from staff and wire reports
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Colgate-Palmolive
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