P&G Reports a Loss in the Fourth Quarter

The Procter & Gamble Company today reported a net loss for the quarter of $320 million or -$0.23 per share due to a $1.16 billion after-tax restructuring charge taken as part of the company’s efforts to streamline its organization structure and business portfolio. Although unit volume grew 3% in the quarter, sales fell 1% to $9.58 billion.

For the fiscal year, net sales were $39.24 billion. Exchange impacts reduced sales by more than 3%, according to P&G. Excluding these effects, net sales were up 2% on flat unit volume. Net earnings were $2.92 billion. Excluding restructuring costs, core net earnings were $4.40 billion, or $3.12 per share, up 6%. Core earnings progress reflects actions to improve margins, as well as divestiture gains from non-strategic brands and improved tax rates.

“Our goal this year was to get P&G’s business growing again. We’ve made solid progress throughout the year, but we still have work to do,” said A.G. Lafley, president and chief executive officer of Procter & Gamble. “Our focus for fiscal 2002 will be to continue to deliver superior consumer value, restore consistent innovation on our core brands and achieve the restructuring savings we’ve promised. I have confidence in P&G’s long-term growth potential. We will continue to drive the key strategic choices we have made this year and deliver on our commitments.”

By product category, P&G said beauty care increased profitability behind innovative, high-margin, global brands. Net sales were $7.26 billion, up 2% excluding a 4% impact of unfavorable exchange rates, primarily in Western Europe and Asia. Unit volume was flat versus the prior year, excluding a 1% negative impact of divestitures. Volume growth in hair care and skin care was offset by competitive activity in deodorants and bar soaps. Net earnings were $972 million, up 9% behind the successful expansion of high-performance, premium-priced products, and the global restage of Pantene and Head and Shoulders. Latin America in particular, posted record results on double-digit top line growth. Skin care, hair care and cosmetics had strong years led by recent launches of Olay Daily Facials, Olay Total Effects, Max Factor Lipfinity and Cover Girl Outlast-breakthrough technologies that provide superior consumer value and form the foundation for future growth.

Fabric and home care trends reflect the significant effort to restore historical margins through innovation combined with necessary pricing, disciplined cost focus, and more efficient marketing. Net sales for the segment were $11.66 billion, down 1% versus a strong year ago base, excluding a 3% unfavorable exchange impact. Unit volume decreased 2% impacted by heavy competitive activity, primarily in Western Europe. Net earnings grew 13% to $1.64 billion. Earnings growth was primarily due to pricing actions and lower taxes. Latin America delivered significant earnings progress, reflecting disciplined cost management. Earnings progress in the June quarter was particularly strong due to the benefits of accelerated overhead reduction efforts.