* Q2 EPS $1.17 vs Street view $1.16

* Sales at $3.81 billion below Street view of $3.94 bln

* Reiterates forecast for double-digit EPS growth in 2010

* FY hit from Venezuela currency devaluation higher

* Shares fall 7 pct

(Adds CEO comment, details, updates stock)

By Ben Klayman

DETROIT (Reuters) - Colgate-Palmolive Co
posted weaker-than expected second-quarter sales and said it
would take a bigger hit from Venezuela's currency devaluation,
sending its shares down 7 percent Thursday.

The maker of toothpaste and other consumer goods repeated
its profit outlook for 2010, but said its ad and promotional
spending for the rest of the year will rise.

Consumer-goods makers like Colgate have focused on rolling
out new products and boosting promotions to entice
value-seeking shoppers. Global ad spending at the toothpaste
and household products maker rose 1 percent in the quarter to
$395 million.

"We have seen an uptick in promotional activity in the
second quarter across a broader array of categories. We have
responded to that," Chief Executive Ian Cook said on a
conference call with analysts.

Morgan Stanley analyst Dara Mohsenian said in a research
note that sales in the company's ongoing businesses, also known
as organic sales, fell far short of expectations and
competitive pressure from rivals like Procter & Gamble Co
are not likely to ease.

"We would not be buyers on weakness (in the stock) given
our concern that competitive pressure is likely to persist
going forward," said Mohsenian, who has an "equal weight"
rating on the stock.

Colgate's net income in the second quarter rose 7.3 percent
to $603 million, or $1.17 a share, from $562 million, or $1.07
a share, a year earlier.

Analysts polled by Thomson Reuters I/B/E/S had expected a
profit of $1.16 per share.

Sales rose 2 percent to $3.81 billion, below the $3.94
billion analysts had expected.

Organic sales, excluding foreign exchange, acquisitions and
divestitures, increased 3.5 percent. That was far below the
consensus 7 percent gain expected and the company's implied 6
percent to 8 percent guidance, Mohsenian said.

Volume of goods sold was up 3 percent and global pricing
rose 0.5 percent.

The company also said the full-year hit of a currency
devaluation in Venezuela would be 10 to 15 cents a share, up
from its previous estimate of 6 to 10 cents. In April,
Colgate's profit fell as it took a hefty charge to account for
hyperinflation in that country.

The company reiterated that it expects double-digit
earnings-per-share growth this year. Analysts were expecting
$4.83 a share, or an increase of 10.5 percent from $4.37 last
year.

Colgate, about one-fifth the size of P&G, said it expects
its gross profit margin to be "up nicely" for the year. At 58.8
percent in the second quarter, it was even with last year.

The New York-based company expects North American organic
sales to be up in the low single digits percentage wise for the
third quarter and the full year, with operating profit up
modestly.

For Europe, Colgate sees organic sales growth in the
low-single digits for both periods, while operating profit will
be down in the third quarter and up modestly for the year.

In Latin America, the company expects organic sales to be
up in the high single digits, while operating profit will be
down modestly. It sees organic sales and operating profit in
Greater Asia/Africa both up double digits for both periods.

In the company's Hill's pet food unit, it expects organic
sales to be down modestly in the third quarter and for the full
year, while operating profit will increase modestly.

Also on Thursday, Colgate sued GlaxoSmithKline PLC,
seeking a court order that its packaging for Colgate toothpaste
does not infringe trademarks held by the maker of Aquafresh.

Colgate shares fell as low as $76.66, and were still off
$5.81, or 6.9 percent, at $78.02 in afternoon trading on the
New York Stock Exchange. P&G's stock was off almost 2 percent.
(Reporting by Ben Klayman; Editing by Gerald E. McCormick,
Maureen Bavdek and Gunna Dickson)