Procter & Gamble Co. on Tuesday posted an unexpected rise in profit in the latest quarter as revenue slid less than anticipated amid organic sales growth.

During the September quarter, P&G said organic sales, a closely watched metric that strips out currency moves, acquisitions and divestments, grew 3%. Overall pricing remained flat while volume improved 2%. Excluding acquisitions and divestitures, core volume rose 3%.

And all five of P&G's segments recorded core volume improvement—2% in beauty, 3% in grooming, 5% in health care, 4% in fabric and home care and 4% in baby, feminine and family care.

Chief Executive David Taylor pointed to organic sales growth across all product categories as well as strong cost savings. He said earlier this month P&G completed the last major step in its portfolio transformation with the sale of its beauty brands to Coty Inc.

"We're pleased with the progress we're making, but there is still more work to do to get back to the levels of balanced top- and bottom-line growth and cash generation," said Mr. Taylor.

P&G—which has struggled for years to accelerate sales growth and has underperformed smaller, nimbler rivals—has been slashing costs and commanding higher prices for staples from shaving cream to paper towels.

In all for the latest quarter, P&G reported a profit of $2.71 billion, or 96 cents a share, up from $2.6 billion, or 91 cents a share, a year ago.

Excluding special items, adjusted per-share earnings rose to $1.03 a share. Revenue edged 0.1% lower to $16.5 billion. Analysts polled by Thomson Reuters had forecast adjusted earnings to remain flat at 98 cents a share on $16.49 billion in revenue.

Gross margin was 51.0%, from 50.7%.

The company backed its 2017 forecast for per-share earnings growth in the mid-single digits from fiscal 2016's $3.67 a share and sales growth of about 1%.

P&G shares, which have risen 5.9% so far this year, added another 0.5% premarket to $84.55.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

October 25, 2016 08:05 ET (12:05 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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