Profits Falls at Proctor & Gamble, Tops Projections
Second quarter income for Proctor & Gamble fell by 16% as the largest consumer products manufacturer in the world faced a tough comparison of results from a year ago, flat global sales and a stronger dollar.
However, adjusted earnings at P&G exceeded expectations on Wall Street and the company kept its guidance for 2014. Shares edged up in trading before the bell on Friday morning.
P&G, based in Cincinnati, whose products include Crest toothpaste, Gillette razors and Tide detergent, is going through a turnaround that includes a focus on the core businesses that are most profitable and slashing its costs to save as much as $10 billion by the 2016 fiscal year.
Net income at P&G for the quarter ending December 31 was $3.43 billion or the equivalent of $1.18 a share. That was down from a year ago when it was $4.06 billion and $1.39 a share.
Results from December 31 of 2012 included a share gain of 21% related to the acquisition of the remaining Iberia joint venture.
Company officials said sales had been in line with overall growth in the consumer products market, from flat to 1% in markets that are developed, and up to 8% in developing markets.
Omitting restructuring costs during the most recent quarter, earnings ended $1.21 a share, which was one cent higher than analysts’ expectations.
Revenue was up less than 1% to end the quarter at $22.27 billion, which was short of the $22.33 billion expected by analysts.
However, Proctor & Gamble did reiterate that it expected a sales growth of between 3% and 4% excluding currency exchange and acquisitions and a 5% to 7% growth per share in earnings, excluding any items that were one-time.
Shares at the consumer products manufacturer were up by 71 cents during Friday’s premarket trading to $78.95.
P&G officials said a prostate cancer awareness movement of growing moustaches around the world in November hurt sales of its Gillette razors.
The CFO of the company said the movement that started back in 2013, had exacerbated into a trend that has become deeper seated that has affected sales of razors. In the quarter ended December 31, razors sales growth slowed.