P&G is not in Crisis, Insists CFO

Consumer products giant Procter & Gamble Co., which last month said it will cut an additional 9% of its workforce and has reported lower operating earnings in its last four quarters, is not in a crisis, its chief financial officer said Monday.

“The notion that the company is in crisis is absolutely false,” Clayton Daley, chief financial officer of the maker of Tide laundry detergent, Crest toothpaste and other products, said at an investor conference hosted by Banc of America Securities.

Cincinnati-based P&G has suffered for several quarters from missteps like price increases that cost it market share and spending on new products that never took off in the market. One segment hurt by price increases was the company’s paper products business. The company raised prices on Bounty paper towels by about 9% last year, then rolled back the increase when it lost market share.

“The paper business has taken a little longer to turn than I’d hoped,” Mr. Daley said.

But the company has a strong lineup of new diaper and other paper products that will be launched in the next 12 months and will help to improve that business, he said.

And it still has some strong businesses, including its hair care and skin care businesses, where brands like Pantene and Olay have done well. In fact, Olay will become the company’s next $1 billion brand, Mr. Daley said. P&G has been plagued by the strength of the dollar against the euro, which reduces the value of its sales in Europe when they are translated into dollars.

“Our hope for our next fiscal year is not necessarily that the dollar weakens, but that it just doesn’t get stronger,” he said.