Procter & Gamble 4th-quarter profit rises, helped by price increases, higher volume
CINCINNATI – The Procter & Gamble Co., maker of Crest toothpaste, Pampers diapers, Tide detergent and other well-known household products, said Wednesday its fourth-quarter profit grew 36 percent, as price increases helped boost revenue.The results beat analysts’ expectations and the company’s shares soared nearly 5 percent.Quarterly profit was $1.9 billion, or 55 cents per share, compared to $1.39 billion, or 52 cents per share, during the same period last year.The latest results include a dilution of between 6 cents and 8 cents from the company’s acquisition of Gillette.Analysts, on average, predicted a profit of 54 cents on earnings of $17.5 billion, according to a Thomson Financial poll.Revenue climbed 25 percent to $17.84 billion, from $14.26 billion last year. Organic sales, which exclude the impact of acquisitions, divestitures and foreign exchange, increased 8 percent.”In general, the core business is doing quite well,” said Patrick Schumann, an analyst with Edward Jones & Co. in St. Louis. “Some of the concerns on Gillette, we believe, have been overdone. We continue to think the combination of the two is good long-term. We’re upbeat.”Sales results were helped by price increases across several segments and the addition of the Gillette business acquired late last year. In addition, unit volume grew 23 percent, or 6 percent excluding newly acquired or former businesses.Beauty unit sales grew 9 percent to $5.44 billion, helped by growth from the company’s Pantene, Head and Shoulders, Oil of Olay and other brands. Health Care sales jumped 35 percent to $1.97 billion, buoyed by adding the Gillette Oral Care business. Household care sales grew 9 percent to $4.35 billion, helped by price increases and gains from brands including Tide and Ariel.Baby care and family care sales grew 4 percent to $3.08 billion, as price increases in the U.S. and Western Europe offset rising commodity and energy costs.Sales at the division that markets pet health, snacks and coffee products grew 2 percent to $1.11 billion as a double-digit earnings increase in snacks offset a decrease in coffee and pet health.For the year, profit grew 25 percent to $8.68 billion, or $2.64 per share, from $6.92 billion, or $2.53 per share last year. Revenue gained 20 percent to $68.22 billion, from $56.74 billion last year.”This marks the fifth consecutive year in which P&G has delivered topline growth at or above the company’s targets,” A.G. Lafley, president and CEO, said in a statement.”We’re focused on delivering a full decade of strong top and bottom line growth,” Lafley told analysts later.The company expects 2007 earnings to be between $2.96 to $3, including a 12 cent to 18 cent dilution due to Gillette. Sales are expected to grow 8 percent to 11 percent from 2006 levels.Analysts expect a profit of $2.99 on revenue of $68.03 billion.P&G expects to report a first-quarter profit of 76 cents to 78 cents, with Gillette-related costs diluting earnings by 5 cents to 7 cents. It expects organic sales growth of between 5 percent and 7 percent.Analysts are looking for a profit of 78 cents on revenue of $18.24 billion.Shares of P&G rose $2.66, or 4.8 percent, to $58.59 on the New York Stock Exchange. Shares have traded in a 52-week range of $52.75 to $62.50.—On the Net:Procter & Gamble Co.: http://www.pg.com
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