By Anna Prior
Procter & Gamble Co. reported better-than-expected
second-quarter earnings as the world's largest consumer-products
company had positive sales in all segments but beauty.
Shares of the company rose more than 3% Friday following the
report.
"P&G's second-quarter results came in as we expected,"
P&G Chief Executive A.G. Lafley said 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.
Mr. 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.
Sales in the company's other segments--grooming, health care,
fabric and home care, and baby and family care--each reported
organic sales growth in a low single-digit percentage.
Overall, organic sales, which strip out currency movements and
the impact of acquisitions and divestitures, rose 3%. Unit volume
rose 3%.
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.
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.
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%.
Write to Anna Prior at anna.prior@wsj.com
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