* Q3 core EPS $0.94 vs Wall St view $0.93
* Full-year forecast cut on pricing issues, commodity costs
* Shares down 3.2 pct at $64.75
By Jessica Wohl
April 27 (Reuters) - Procter & Gamble Co cut its full-year profit outlook, citing weakness in developed markets and said it would need to roll back some price increases, frustrating investors who wanted faster results from its business overhaul.
The world's largest household products maker, whose shares fell more than 3 percent on Friday, has been underperforming rivals such as Unilever and Colgate-Palmolive Co. In February, it announced a restructuring plan to cut 5,700 nonmanufacturing jobs and $10 billion in costs by the end of fiscal 2016.
P&G, which makes Pampers diapers and Gillette razors, said on Friday it continues to feel the pinch of higher costs for commodities, such as diesel fuel, alcohol and chemicals.
And in Venezuela, where P&G sales are worth an annual $1 billion, new regulations forced the company to cut prices by as much as 25 percent, according to Chief Financial Officer Jon Moeller. Venezuela froze prices on 19 key goods in December in an attempt to combat inflation.
"Where is the taking responsibility for the weak numbers, as opposed to saying 'not our fault, it's just really tough out there'?" Citigroup analyst Wendy Nicholson said on a conference call with senior management.
P&G Chief Executive Bob McDonald said that as CEO, he took responsibility. But the admission didn't satisfy analysts.
"How long do you expect investors to wait? How long does your current plan have to work? How much patience does the board have?" asked Sanford Bernstein analyst Ali Dibadj.
P&G said earnings fell to $2.41 billion, or 82 cents per share, in its fiscal third quarter through March, from $2.87 billion, or 96 cents per share, a year earlier.
Core earnings per share, which excludes items such as restructuring charges, were flat at 94 cents, a penny above the average analyst estimate, according to Thomson Reuters I/B/E/S. Sales grew 2 percent to $20.19 billion, a tad below the average Wall Street forecast of $20.29 billion.
The results came a day after Anglo-Dutch consumer goods giant Unilever beat market expectations with an 8.4 percent rise in first-quarter sales, sending its shares up 3 percent. Colgate-Palmolive Co's quarterly sales rose 5.2 percent, also slightly better than anticipated.
HASN'T INNOVATED ENOUGH
McDonald, who became P&G's CEO in July 2009, said the company has not innovated enough in certain areas, particularly beauty care in the United States. More broadly, he blamed flat volume growth in the categories where P&G competes.
"The CEOs I talk to basically say that they see a decelerating trend," McDonald told reporters. Much of the growth in developed markets "will be share growth, because the markets aren't growing," he said.
P&G, like many other household products makers, has raised prices to mitigate the impact of higher commodity costs. It rolled out $3.5 billion worth of price increases this year, but about $100 million to $200 million of them didn't stick as competitors didn't match them, CFO Moeller said on the call.
Now P&G is rescinding some of the increases, either by lowering prices, or keeping them unchanged while increasing the size of the products. The rollbacks are coming in laundry detergent in the United States, Britain and Mexico, and North American oral care, dishwasher detergent, and blades and razors.
P&G said it now expects core earnings per share of $3.82 to $3.88 this year, on sales growth of 4 percent. Back in February, it had forecast $3.93 to $4.03 for the year ending in June.
Analysts were expecting full-year profit of $3.96 per share.
P&G expects to earn 79 cents to 85 cents per share in the current quarter. It forecasts 1 percent to 2 percent sales growth and said organic sales, which strip out the impact of deals and currency, should rise 4 percent to 5 percent.
Shares of P&G fell 3.5 percent to $64.52 on the New York Stock Exchange.