NEW YORK — With sales volumes up and restructuring costs no longer weighing on results, the Procter & Gamble Co. reported double-digit earnings increases for the first quarter.

For the three months ended Sept. 30, the Cincinnati-based consumer products giant said earnings expanded 20.3 percent to $1.76 billion, or $1.26 a diluted share, beating Wall Street’s consensus estimate by 1 cent. Comparatively, the company reported earnings of $1.46 billion, or $1.04, last year.

In a statement, the company attributed the positive results to lower manufacturing costs, higher volumes and the absence of $113 million in restructuring charges that had adversely affected last year’s results.

Sales for the period increased 13 percent to $12.2 billion from $11 billion last year, largely driven by double-digit growth from the company’s beauty and health-care divisions. Favorable foreign exchange rates were responsible for 3 percent of the quarterly sales gain.

Sales in the beauty division grew 20 percent to $3.75 billion, getting a sizable boost from the Wella acquisition. Excluding Wella, beauty care sales increased 8 percent on the strength of the company’s Pantene, Head & Shoulders, Always/Whisper and Olay brands. Beauty’s contribution to earnings was $616 million, a 12 percent increase from the year-ago quarter.

The health-care division led the sales growth charge, increasing 23 percent to $1.73 billion.

A.G. Lafley, president and chief executive officer, said during a conference call, “If you think about P&G’s strategy, we are interested in the faster growing personal care, beauty care and health-care industries. I think it’s been clear that the majority, but not all, of our acquisition activity has been in these industries.”

For the quarter ending in December, the company expects sales to increase 14 to 19 percent. Sales from the recently completed Wella acquisition are expected to contribute 6 to 7 percent of that.

To continue reading this article...

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus