S&P companies go global, with almost half of sales coming from outside of US

Few companies deserve to be called “all-American” more than Colgate-Palmolive. The roots of the consumer products company go all the way back to 1806 when William Colgate opened a soap and candle company in New York City.

A merger in 1928 with Palmolive created the company name that carries forward today.

Yet it might come as a surprise that just 18 percent of the annual sales of the company's products are now generated in North America. Colgate-Palmolive has become a true global company.

The largest market for the company’s toothpaste, oral care and other consumer products is Latin America, representing 29 percent of sales, according to its recent quarterly report.

Sales in Europe, the South Pacific, Asia and Africa make up the remainder of the international marketplace served by the company.

In other words, the United States has become the smallest of the global markets for the goods manufactured by Colgate-Palmolive.

This is hardly a unique situation. A report issued by Standard & Poor’s finds that 46.1 percent of the sales by companies in the S&P 500 stock index in 2011 came from outside the United States. That is down slightly from the previous year and below the peak of 47.9 percent in 2008.

“While the percentage of foreign sales posted a slight tick downward in 2011, we believe that multiple changes in currency, index membership and contract details negate any strong implications to a third yearly drop,” said Howard Silverblatt, S&P Dow Jones senior index analyst.

The S&P report points out how difficult it is to accurately calculate international sales of U.S. companies, saying, “While nice pictures and messages from senior management abound, tabular tables are few and far between in reports.”

In calculating foreign sales, S&P was only able to find detailed information from 252 of the 500 companies in the S&P index.

“It would be helpful if there were current legislative or policy proposals to require reporting, but there are not. Compounding the issue, companies do not want to report the actual values,” according to the report.

For some companies it is obvious they have become global players in their particular industry.

“Our global footprint, the breadth of industries we serve, and our extensive line of products and services has helped us achieve record-breaking results during this time of heightened economic uncertainty, and execution has been outstanding,” said Doug Oberhelman, CEO of Caterpillar Inc., the heavy equipment manufacturer.

In particular, Caterpillar has benefited from the economic growth in China, but even that region is experiencing a slowdown. Oberhelman says that may be temporary.

“While the industry is down and will likely remain down for most of 2012, we are encouraged by actions the Chinese government has taken to improve growth. Those actions will likely lead to better growth in the construction industry late in 2012 and into 2013,” the CEO said in the recent quarterly report.

A consequence of the global expansion of U.S. companies is where taxes are paid. The S&P report notes that more income taxes by U.S. companies were paid to foreign governments than here at home.

“Only 45.3 percent of all income taxes paid by U.S. companies went to Washington in 2011 versus 54.7 percent paid abroad. Tax policy has become a major issue, even before election posturing started, with the current trend not working in the favor of the U.S.,” Silverblatt said.