Procter & Gamble 3Q net income up on cost cuts
CINCINNATI (AP) — Procter & Gamble Co.’s fiscal third-quarter net income rose 2 percent as it cut costs to offset sluggish sales in categories like beauty and family products.
The world’s largest consumer product maker’s adjusted earnings topped analysts’ estimates, but revenue fell short.
Since CEO A.G. Lafley returned to the company help in May, Procter & Gamble Co. has been focusing on its most profitable markets and products and introducing new products. It sold off most of its pet care business earlier this month for $2.9 billion.
“We’re operating in a slow-growth, highly competitive environment, which places even greater importance on strong innovation and productivity improvement,” Lafley said in a statement.
The Cincinnati-based company’s turnaround plan also includes cutting costs to save $10 billion by fiscal 2016. It said it is redesigning its supply chain in North America, including making more of its 35 manufacturing facilities able to make more than one category of goods and bringing them closer to its customers and consumers.
For the three months ended March 31, the maker of Tide detergent and Gillette razors earned $2.61 billion, or 90 cents per share. That compares with $2.57 billion, or 88 cents per share, last year.
Excluding restructuring charges and other items, earnings were $1.04 per share. Analysts’ forecast $1.02 per share.
Revenue totaled $20.56 billion, down slightly from last year’s $20.6 billion on foreign currency fluctuations. Wall Street expected $20.68 billion.
P&G maintained guidance of full-year adjusted earnings climbing 3 percent to 5 percent.
Citi Investment Research analyst Wendy Nicholson said that the global marketplace is sluggish and intensely competitive, so Procter & Gamble’s results are “pretty darned impressive.”
The stock fell 59 cents to $80.66 in premarket trading shortly ahead of the market open.