P&G’s Earnings Rise 9.4% in Third

Procter & Gamble Co. said on Tuesday that fiscal third-quarter earnings before restructuring related items rose 9.4% as price increases for Tide laundry detergent and Pampers diapers helped offset a decline in shipment volume.

The company, which also saw price increases in Always feminine care products in Western Europe and Pantene shampoo in the U.S., said core earnings, which exclude restructuring items, rose to $1.01 billion, or 71 cents a share, from $923 million, or 64 cents a share, a year earlier.

Analysts had expected core earnings of 68 cents to 71 cents a share, with an average of 69 cents, according to research firm Thomson Financial/First Call.

On Feb. 26, the company said it expected earnings of 69 cents to 72 cents for the quarter, with full 2001 earnings coming in 4 cents to 5 cents below analysts’ expectations of $3.15.

P&G attributed the lowered guidance to the financial crisis in Turkey, its 12th-largest market, although other consumer product makers have said the situation will not have a major impact on them.

Net income, including a $113 million after-tax restructuring charge, was $893 million, or 63 cents a share, compared with $753 million, or 52 cents a share, a year earlier. Third-quarter sales for P&G fell 3% to $9.51 billion, but would have been flat without negative impact from weak foreign currency. Unit volume, or shipments, fell 3%. The company said product launches in the year-ago quarter helped boost volume then.

The decline in shipments came as the company continues to try to get the best prices it can without losing volume, said Lehman Brothers consumer products analyst Ann Gillin Lefever.

The quarter “probably still reflects their adjustment between price and volume,” Ms. Lefever said. Procter & Gamble has had to roll back price increases on products like Bounty paper towels in the past several months because it was losing market share.

The company also said on Tuesday that it was comfortable with the range of analysts estimates for the fourth quarter. First Call said analysts expect earnings before items at 58 cents to 61 cents a share, with an average of 60 cents. That would bring full-year earnings to between $3.10 and $3.13.

P&G said it expects April-June unit volume to be flat to up 2% with net sales excluding exchange effects growing in the low single digits.

In March, P&G said it would cut an additional 9,000 jobs, adding to 15,000 job cuts it had announced in 1999, as it tries to rein in costs.