NEW YORK -- Procter & Gamble Co. (IW 50/14) reported an increase in second-quarter earnings Tuesday, despite a strong dollar that continued to depress the value of foreign sales. Net income of $3.21 billion was up 35.1% from the year-ago period as it cut costs and focused on products with higher profit margins.
Adjusted earnings were $1.12 per share, a gain of 37% and solidly beating the 98 cents projected by analysts.
Revenues slumped nine percent to $16.9 billion in the quarter ended in December, in line with expectations.
The Cincinnati, Ohio-based company said the decline was mainly due to the stronger dollar and a smaller impact from changes in its accounting of the Venezuela business following foreign exchange policy changes in the South American country.
But stripping out the foreign exchange factor and investments and divestitures, so-called "organic" sales increased two percent.
"We are encouraged by our return to organic sales growth in the quarter," said David Taylor, the company's new president and chief executive.
"With the top-line improvement and continued cost reduction, we delivered solid core operating income and EPS growth in the face of significant macroeconomic and geopolitical headwinds."
Taylor took the helm of P&G on November 1, succeeding AG Lafley who led the company's restructuring focused on strengthening its brand portfolio.
The maker of Tide detergent, Crest toothpaste and Pampers diapers said it had bought back $2.0 billion of common stock and paid $1.9 billion in dividends to shareholders in the quarter.
Net sales fell in all five divisions, led by 10% declines in beauty, grooming and baby, feminine and family care products.
The company said various measures had benefited sales, including price increases taken with new product innovations and to offset the impact of currency devaluation in markets such as Russia, Brazil and Mexico.
The company's cost-cutting program, begun more than three years ago, reduced costs by 14% in the second quarter.
Looking ahead to the full fiscal 2016, P&G said it expects net sales to fall by high single digits but organic sales to grow between 1% - 5%.
It projected earnings per share would be up 38%-46% from fiscal 2015.
Copyright Agence France-Presse, 2016
