P&G/Colgate, Profit Gains

Procter & Gamble Co., is expecting first-quarter earnings of 76 cents a share, according to Thomson First Call, representing 5.5% earnings growth over last year’s profit of 72 cents a share. Sales are forecast to rise 14% to $15.63 billion from $13.74 billion in last year’s first quarter. However, P&G was downgraded late in the quarter over cost concerns. Citigroup Smith Barney analyst Wendy Nicholson reduced her rating on the company’s stock to hold from buy and cut her price target to $59 from $61 because she said rising costs and other factors will constrain earnings growth. Reflecting that downgrade, P&G said it is looking to reduce its dependence on petroleum derivatives by finding alternatives, such as palm and coconut oil that could be used in its detergents and shampoos. Analysts are forecasting that Colgate, will post earnings of 67 cents a share, up from last year’s profit of 58 cents. Sales are expected to advance to $2.85 billion from $2.7 billion in last year’s third quarter.