Procter & Gamble Co.'s fiscal second-quarter earnings fell
16% as the world's largest consumer-products company reported sales
that were nearly flat with a year ago.
Core earnings, however, still beat Wall Street's
expectations.
P&G Chief Executive A.G. Lafley came out of retirement for a
second stint at the CEO role last year after the company took a
series of stumbles under predecessor Bob McDonald. Since returning
to P&G, Mr. Lafley has focused on improving P&G's core
business and improving its lagging beauty business, which generates
nearly $20 billion in sales.
In the latest period, the beauty segment's organic sales were
flat, driven by growth in prestige, hair care, deodorants and
personal cleansing categories. The segment's results, however, were
hurt in part by a decrease in skin-care sales.
P&G has been cutting costs and eliminating jobs to catch up
with its rivals' productivity levels and help fund new products,
ranging from unit-dose Tide Pods laundry detergent to thicker
Bounty paper towels.
"P&G's second quarter results came in as we expected," said
Mr. Lafley on Friday, adding that the company is on track to
deliver its objectives for the fiscal year.
"We expect strong earnings growth in the second half of the
fiscal year driven by solid top-line growth, moderating headwinds
from foreign exchange, and productivity savings that build
throughout the year," he said.
For the latest quarter, P&G reported a profit of $3.43
billion, or $1.18 a share, down from $4.06 billion, or $1.39 a
share, a year earlier. Excluding special items such as
restructuring expenses, core earnings fell to $1.21 a share from
$1.22 a year ago.
Sales edged up 0.5% to $22.28 billion. Organic sales, which
strip out currency movements and the impact of acquisitions and
divestitures, rose 3%. Unit volume rose 3%.
Analysts polled by Thomson Reuters projected per-share earnings
of $1.20 and revenue of $22.33 billion.
Gross margin narrowed to 50% from 50.9%. Selling, general and
administrative expenses edged down 3%.
The company reiterated its full-year guidance.
Write to Anna Prior at anna.prior@wsj.com
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