P&G Extends Outsourcing, Expects Fourth Quarter Increases

Seeking to focus on increasing sales of its consumer products, The Procter & Gamble Co. plans to hire four contracts to take over various administrative tasks and build sales of its nearly 300 consumer brands, including Tide detergent, Crest toothpaste and Clairol hair care items.

P&G has an agreement in principle and a hopeful five-year contract with Jones Lang LaSalle Inc., a Chicago-based real estate management firm, for all of P&G’s research centers and offices.

On May 6, P&G signed a $3 billion, 10-year contract for Hewlett-Packard Co. to assume its information technology services. Hewlett-Packard is to absorb 1,850 P&G employees by this fall.

P&G also hopes to reach separate deals by September to hire out its employee services and accounts payable operations, which also would involve transferring workers to the contractors. Chief executive officer A.G. Lafley has made such deals a priority since taking over the company in 2000 to streamline operations and focus on core businesses.

P&G also said it expects fiscal fourth quarter profit per share to come in at the high end of its forecast range, helped by cost-cutting measures and the weak dollar. But that outlook ends a string of six quarters for which the company raised guidance.

The company said it expected sales to grow 6-7% and earnings excluding restructuring items to rise about 12% for the fourth quarter. In May, P&G stood by its outlook calling for earnings per share growth of 10-12%, despite tornado damage at its lone North American snacks plant, which it said would cut sales growth by 1% or less.