Procter & Gamble Co. on Wednesday warned that a slowdown in developed countries hitting demand for its consumer products and negative foreign exchange effects will lead to a drop in sales and profits.
Cincinnati-based P&G (IW 500/10), which makes Gillette razors, Tide laundry detergent and other globally recognized consumer products, said it expects earnings per share of 75 cents to 79 cents in the quarter ending this month.
That was down from the 79 cents to 85 cents it had expected previously and below the average analyst expectation of 82 cents per share.
P&G said in a statement that "the revisions to the company's fourth-quarter outlook are primarily driven by slower-than-anticipated top-line growth from slower-than-expected market-growth rates and market-share softness in developed regions and negative impacts from foreign exchange-rate changes."
It said organic sales growth for the quarter is now expected to be in the range of 2% to 3% instead of 4% to 5%.
Foreign exchange effects are expected to reduce net sales by some 4%, with the final figure now expected to be down 1% or 2% instead of up 1% or 2%, the company added.
For its 2012-2013 fiscal year, P&G said organic sales are expected to increase in the range of 2% to 4%. Earnings per share should post a percentage rise of mid-single digits.
"We are making the necessary adjustments to our growth strategy to increase focus on our core business and to achieve more balanced growth across geographies, product categories and the top and bottom lines," P&G CEO Bob McDonald said at a consumer products conference in Paris on Wednesday.
In its third quarter, P&G saw net profit fall 16% from the year-ago quarter to $2.4 billion despite a 2% rise in sales.
Copyright Agence France-Presse, 2012
