P&G Profit Up 45%

Aug. 3, 2012
Sales growth increased in four of the company's five business segments compared with a year ago.

Boosted by the sale of its snacks business, Procter and Gamble (IW 1000/33) on Friday posted a sharp rise in earnings for its fiscal fourth quarter.

P&G said net profit rose 45% from the year-ago quarter to $3.6 billion.

The sale of its Pringles potato-chip business to The Kellogg Co. for $2.7 billion in an all-cash transaction added a net gain of 48 cents per share, P&G said. Excluding one-time items, earnings per share were 82 cents in the April-June quarter, well above the average analyst estimate of 77 cents.

Net sales fell 1% to $20.2 billion, slightly missing expectations of $20.3 billion.

P&G, the maker of Gillette razors, Tide laundry detergent, Crest toothpaste and other consumer products, said the decline was primarily due to a negative foreign exchange impact, which reduced sales by 4%.

The Cincinnati, Ohio-based company, which has a presence in about 180 countries, has been battling rising commodity costs and a stronger dollar.

Sales growth increased in four of the company's five business segments compared with a year ago.

"Despite a difficult macro environment, we see significant opportunities for top- and bottom-line growth," said CEO Bob McDonald.

"We enter fiscal 2013 with very strong developing market momentum, strengthened plans on our core developed market business, and with the benefit of a $10 billion cost-savings program, which is well under way," he said.

For its first fiscal quarter, from July to September, P&G predicted earnings per share of 83 cents to 91 cents and net sales growth down as much as six percent. "A major driver of the lower first-quarter EPS outlook is foreign exchange, which is forecast to reduce net earnings by five to six percent versus the prior year," it said.

The company said it will repurchase $4 billion in P&G stock during the fiscal year.

Copyright Agence France-Presse, 2012

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