P&G Meets Earnings Estimates

Procter & Gamble reported a profit before a restructuring charge of $1.24 billion, or 88 cents a share, meeting expectations of analysts as polled by First Call. Last year, the consumer products maker also made 88 cents a share. Including the charge, net income was $1.16 billion, or 82 cents a share, compared with $1.15 billion, or 80 cents. Revenue was $9.97 billion up 1% from $9.92 billion in 1999. Excluding the impact of foreign currency, mostly because of a weak euro, sales rose by 4%.

“We’ve delivered the quarter we said we’d deliver,” said Clayton Daley, P&G’s chief financial officer, in a conference call with analysts. “All measures, top and bottom line, gross and operating margins, and business segment profits, came in as expected.”

For the full year, he said, revenue should rise by 4-6% excluding the impact of foreign currencies. Including the currency fluctuations, sales should be up between 1-3% Volume is expected to gain between 1-2% for fiscal 2001. As for earnings, the company forecasts a 7-10% increase. During the first quarter, among its business units, beauty care had the best earnings gains while health care showed the strongest sales growth. Overall, the foreign currency impact dragged down revenue.

Overseas, Procter & Gamble transacts business in the country’s local currency and then accounts for it in U.S. dollars. If foreign currencies are weak against the dollar, when the revenue figure is converted, it will translate to a smaller amount. In fabric and home care, sales dropped by 3% to $3.08 billion mainly due to foreign currencies.

Unit volume was flat as gains in laundry products in North America were more than offset by weakness in Western Europe. Profits rose by 3% to $498 million due to lower costs in developing markets, divestiture of minor brands and lower taxes.

Beauty care products sales rose by 2% to $1.87 billion while unit volume was flat. Net earnings rose by 19% to $267 million due to higher prices, lower taxes and a weak year-ago comparison.