Stung by higher input costs, consumer goods giant Procter & Gamble Co. (PG) on Friday reported a lower third-quarter profit and trimmed its earnings guidance for the rest of the fiscal year.
A modest rise in sales helped core earnings top analyst expectations by a penny.
"We delivered broad-based organic sales growth, with all of our business segments growing, in a difficult macroeconomic and competitive environment," Chairman, President and CEO Bob McDonald said in a statement.
Sales were up 2 percent to $20.19 billion, but missed estimates by a whisker.
The Cincinnati, Ohio-based maker of Tide detergents, Crest toothpaste and Gillette shaving razors reported net earnings of $2.41 billion or $0.82 per share for the third quarter, lower than $2.87 billion or $0.96 per share in the prior-year quarter.
The company said core earnings, which excludes certain items, remained flat with last year at $0.94 per share. On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.93 per share for the third quarter. Analysts' estimates typically exclude special items.
The company said in February that it is targeting productivity and cost savings of about $10 billion by 2016.
"We are making good progress against our productivity and cost savings program and improving core operating profit growth as we continue to execute our innovation and portfolio expansion plans," McDonald noted.
Looking ahead to the fourth quarter of fiscal 2012, P&G expects core earnings in a range of $0.79 to $0.85 per share, on net sales growth of 1 to 2 percent.
Analysts are now looking for earnings of $0.93 per share for the fourth quarter, on revenues of $20.80 billion.
For fiscal 2012, the company trimmed its core earnings guidance to a range of $3.82 to $3.88 per share from the prior outlook of $4.00 to $4.10 per share. Net sales is now expected to grow at 4 percent, at the top end of its earlier projection of 3 to 4 percent net sales growth.
Street is currently looking for full-year 2012 earnings of $3.96 per share, on annual revenues of $84.89 billion.
"Looking ahead, we expect further acceleration in core operating profit growth in the fourth quarter driven by top-line growth, more favorable cost comparisons and productivity improvements," McDonald added.
In mid-February, P&G salvaged the deal to sell its Pringles snack business to cereal maker Kellogg Co. (K) for about $2.7 billion. This was after its agreed $2.35 billion deal with Diamond Foods, Inc. (DMND) fell apart due to an accounting probe at Diamond. P&G now projects a gain of $0.47 to $0.50 per share from the deal.
PG closed Thursday's regular trading session at $66.87, up $0.23 on a volume of 8.42 million shares. In the past 52-week period, the stock has been trading in a range of $57.56 to $67.95.
by RTT Staff Writer
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