(Adds details from the conference call)
By Phil Wahba
April 23 Procter & Gamble Co, the world's
largest household products maker, reported a higher quarterly
profit on Wednesday, helped by cost cutting and stronger sales
of items like detergent and air freshener.
But net sales in the third quarter were unchanged at $20.6
billion, disappointing investors looking for faster growth
several years into P&G's efforts to focus on core products.
Organic sales, which exclude the impact of divestitures and
acquisitions, rose 3 percent, but a strong U.S. dollar wiped out
Shares fell 1 percent to $79.85 in morning trading and one
analyst said P&G needs faster growth to lift shares.
"We believe a sustained acceleration in organic growth
toward the upper end of the 3 percent-4 percent range is
necessary for material upside to the stock," said Oppenheimer &
Co analyst Joseph Altobello in a research note
P&G stock is 7 percent below a 52-week high in November.
It has been under pressure to launch innovative products and
streamline its businesses. Two weeks ago, P&G said it was
selling the bulk of its pet food business to Mars Inc for $2.9
billion. In recent years, it also sold its
Folgers coffee brand and Warner Chilcott pharmaceuticals.
Under a 5-year, $10 billion restructuring plan announced in
February 2012, P&G has sought to cut expenses by streamlining
management, lowering overhead costs, cutting jobs and reducing
marketing costs. Chief Financial Officer Jon Moeller told
reporters the restructuring was running ahead of schedule.
Organic sales in P&G's fabric care and home care division,
which generates almost one third of sales, rose 6 percent.
Brands in that category include Tide, Febreze air freshener and
Grooming, its most profitable business, saw sales rise 1
percent. P&G's struggling beauty division, which includes Head &
Shoulders and Olay, improved, with sales up 2 percent.
The company has been pushing hard for market share in
emerging markets. The effort is paying off. Organic sales in
emerging markets rose 5 percent, compared to 1 percent in
developed markets, Moeller said.
But P&G's profit in those markets is lower given the money
it is spending on marketing to establish itself.
The maker of Pampers diapers and Tide detergent earned $2.61
billion, or $0.90 per share, in the fiscal third quarter ended
March 31, up slightly from $2.57 billion, or $0.88 per share, a
Core earnings per share, excluding restructuring charges,
rose 5 percent to $1.04, 3 cents better than expected, according
to Thomson Reuters I/B/E/S.
P&G left its fiscal 2014 forecasts unchanged. It still
expects organic sales to rise 3 percent to 4 percent, and core
earnings to rise 5 percent to 7 percent.
P&G graphic: link.reuters.com/jyc78v
(Reporting by Phil Wahba in New York, Editing by Franklin Paul
and Sofina Mirza-Reid)