Procter & Gamble Profit, Sales Up in 4Q

CONSUMER PRODUCTS – MARKET

Procter & Gamble Profit, Sales Up in 4Q
Consumer products maker Procter & Gamble Co. on last 1 August 2005 said fourth-quarter profit rose 9 percent, led by strong volume growth in its beauty, health and home care segments, and the company backed analysts' earnings forecast for its current quarter and fiscal year.

Shares of Procter & Gamble, the maker of Tide detergent, Pantene shampoo, Crest toothpaste and other household brands, fell 37 cents to $55.26 in early trading on the New York Stock Exchange. It has agreed to buy shaving products maker Gillette Co.

Procter & Gamble reported earnings of $1.5 billion, or 56 cents per share, for the three months ended June 30 compared with $1.37 billion, or 50 cents per share, in the prior-year period. Sales jumped 10 percent to $14.26 billion from $12.96 billion.

The results topped analysts' expectations for profit of 55 cents per share on revenue of $14.05 billion, according to a survey by Thomson Financial.

Organic sales - which strip out the effects of acquisitions, divested businesses and foreign exchange swings, rose 9 percent. Unit volume grew 6 percent, led by strong gains in Procter & Gamble beauty, fabric, health and home care businesses, particularly in developing markets.
In the beauty segment, earnings climbed 27 percent to $644 million on sales of $4.93 billion, driven by strong growth of the Olay brand and solid results in emerging markets.

In the family health segment, earnings surged 42 percent to $182 million, while sales jumped 16 percent to $1.9 billion. Procter & Gamble credited the improved performance to continued success of Prilosec, its popular over-the-counter heartburn drug.

In the household care segment, earnings fell 11 percent to $458 million, hurt by higher commodity costs, but sales rose 10 percent to $3.85 billion. Procter & Gamble said higher commodity costs posed "significant challenges" during the quarter, but the company responded with price increases across most of its businesses.
For the current quarter and full year, Procter & Gamble said it is "comfortable" with analysts' current consensus estimate of 78 cents per share and $2.93, which excludes the effects of stock option expensing and an accelerated share buyback program.

Sales growth is expected to range from 6 to 8 percent, the company said. Procter & Gamble in January said it would buy back $18 billion to $22 billion of its shares over the next 18 months as part of the Gillette deal. The increase in share repurchases is expected to bolster earnings by a penny per share for the quarter, while stock option expensing will reduce profit by 3 cents per share.
Write: by LuisB