P&G’s Quarter Sales Up 6% to $11.01 Billion

The Procter & Gamble Co., Cincinnati, announced strong business growth for the quarter ended Dec. 31, 2002. This is the fourth consecutive quarter of double-digit core earnings progress and attainment of long-term growth objectives, according to executives.

Unit volume grew 8% for the quarter over the prior year due to double-digit growth in the health care and beauty care businesses, and strong results in the baby and family care business. Reported net sales were $11.01 billion, up 6% versus a year ago, as strategic pricing investments and mix partially offset volume growth. The net foreign exchange impacts increased sales by 1%, reflecting the benefits of the euro offset by Latin American devaluations.

“This was a strong quarter where we exceeded expectations despite a very challenging global economic and competitive environment,” said A. G. Lafley, chairman, chief executive and president of P&G. “At the midpoint of our fiscal, we are well positioned to meet our growth goals for the year. We have the right strategies and we’re making the necessary systemic interventions to sustain long-term top- and bottom-line growth objectives.”

Net earnings for the quarter were $1.49 billion, up 14% versus year ago. Results included a $98 million after tax restructuring charge related to the company’s program to streamline its operations and business portfolio. Core net earnings, which excludes restructuring charges, grew 10% to $1.59 billion in the quarter.

Double-digit earnings progress was achieved by each business segment, despite the economic challenges in Latin America, P&G executives said.

Fabric and home care net sales were $3.10 billion, up 5%. Sales growth trailed volume due to pricing adjustments to restage the North American Cheer brand. Baby and family care unit volume increased 8% and net sales were $2.53 billion, up 7%. Executives said health care delivered excellent results this quarter. Unit volume increased 18% and net sales were $1.57 billion, up 17%. Crest Whitestrips and Actonel both delivered particularly strong volume and sales growth. Beauty care unit volume was up 14%. Volume was up 6% behind strength in hair care, on Pantene and Head & Shoulders, and fine fragrances. Beauty sales grew 10%, including a positive 1% foreign exchange impact, reaching $3 billion.

For the March quarter, volume is expected to be up 6-8% versus year-ago, behind continued core business strength. The net volume impact from acquisitions and divestitures in the quarter is expected to be a negative 1% due to the Jif/Crisco spin merge. Sales, excluding foreign exchange, are expected to be up in the mid single-digits versus a year ago.

For the year, sales growth is expected to be at the top end of the company’s 4-6% target range. At current rates, foreign exchange is expected to have about a 1% positive impact on the topline.