P&G outlook disappoints

By Brad Dorfman

CHICAGO (Reuters) - Household and personal care products leader Procter & Gamble Co (PG.N: Quote, Profile, Research, Stock Buzz) and smaller rival Colgate-Palmolive Co (CL.N: Quote, Profile, Research, Stock Buzz) both posted double-digit quarterly profit increases on Tuesday, but P&G's shares fell as its full-year outlook disappointed analysts.

Colgate shares rallied as its earnings beat analysts' estimates, helped by strong growth in Latin America and increased global market share of toothpaste and manual toothbrushes.

"Colgate is looking into next year and reiterating guidance and P&G is only one quarter into their (fiscal year) and already they are hedging their guidance," said William Chappell, analyst at SunTrust Robinson Humphrey.

P&G said commodity costs will force it to raise prices more, while Colgate said its cost savings programs were offsetting rising commodity prices, he added.

The weaker dollar and strength in emerging markets helped lift both companies' earnings, while price hikes helped mitigate the impact of soaring costs for resin, coffee and other raw materials.

AN UP YEAR FOR P&G

Shares of P&G, stock of which has been up 17.4 percent since the end of June, fell nearly 4 percent as its full-year forecast, excluding a one-time tax benefit, remained unchanged.

P&G had a "strong quarter with organic growth in-line with estimates, but we don't believe this is the quarter that changes the market's opinion on Procter's long-term growth prospects," April Scee, an analyst at Banc of America Securities, said in a research note.