By Dhanya Skariachan
NEW YORK Feb 11 Procter & Gamble Co, the
world's largest household products maker, cut its sales and
earnings outlook for the year on Tuesday to reflect unfavorable
foreign exchange rates in Venezuela and the devaluation of
currencies in various developing markets.
The changed outlook reflects the recent devaluation against
the dollar of the Argentine peso, Turkish lira, South African
rand, Russian ruble, Ukrainian hryvnia, Brazilian real and
several other currencies, said P&G, whose products include
Pampers diapers and Tide detergent.
For U.S. companies that do substantial business in
developing countries, the devaluations cause their earnings in
those currencies to be worth less when converted back to
Procter & Gamble said it now sees growth in core earnings
per share of 3 percent to 5 percent, down from its prior outlook
for growth of 5 to 7 percent. It also revised its forecast for
sales growth to a range of flat to a rise of 2 percent versus
its prior forecast for growth in a range of 1 to 2 percent.
Procter & Gamble shares dipped 0.5 percent to $78.45 in
after-market trading on Tuesday, after closing up 1.4 percent at
$78.84 in regular trade on the New York Stock Exchange.
The U.S. dollar is expected to make steady gains against
major currencies this year as a recovery in the world's largest
economy gains steam and gives the Federal Reserve room to wind
down its stimulus program.
Plunging emerging market currencies have forced many global
companies to hedge foreign currency exposure more aggressively
and raise prices frequently.
Automaker Ford Motor Co., appliance maker Whirlpool
Corp and liquor giant Diageo all cited weakness
and a more sober outlook in once-roaring emerging markets in
earnings reports last month.