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P&G cleans up in 4Q
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July 30, 1998: 10:51 a.m. ET
Despite Asian softness, household product giant posts 12% profit gain
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NEW YORK (CNNfn) - Household product maker Procter & Gamble Co. said Thursday its fiscal fourth-quarter net income grew 12 percent, as brand strength in paper, diaper, cleaning and food products helped offset weakness in regional Asian sales.
Earnings totaled $686 million, or 47 cents a share, in line with Wall Street consensus estimates and up from $611 million, or 41 cents a share, a year earlier. Sales grew 4 percent to $9.277 billion from $8.948 billion.
Excluding the impact of currency translation, Procter & Gamble said sales for the quarter would have grown 7 percent.
For the fiscal year ended June 30, earnings per share climbed 13 percent from the prior year to $2.74. Profit margins spiked 10.2 percent, the sharpest gain in more than half a century.
But the rosy results were dampened by poor sales performances in Asia, where regional net earnings in 1997 plummeted 37 percent to $174 million, hit by increased investment costs and the currency crisis.
Full-year unit volumes in Asia got a 4 percent boost from P&G's acquisition of Ssangyong Paper Co. in Korea and increased ownership of its ventures in China. But net regional sales dipped 3 percent to $3.45 billion in the fiscal year ended June 30.
The strongest gains were seen in North American markets, where full-year net sales increased 5 percent to $18.46 billion on unit volume growth of 4 percent. Roughly half of P&G's sales are generated outside the United States.
North American growth was spearheaded by strategic acquisitions in the company's paper business, including Tambrands Inc. and its premier global brand, Tampax; and the Loreta y Pena paper company in Mexico. Spending on acquisitions exceeded $3 billion in 1997.
Over the past two years, P& G said it has spent more than $3.5 billion to repurchase 53 million shares of stock under a buyback program; the firm said it plans to continue this program in fiscal 1998-1999.
P&G also said it plans to increase its dividend to $1.14 a share, a 13 percent rise, effective Aug. 14, 1998. The company split its stock two-for-one on Aug. 22, 1997.
Procter & Gamble is the nation's leading manufacturer of household products as well as the largest global advertiser, with 300 brands in more than 140 countries. The company's brands include Tide laundry detergent, Crest toothpaste, Pringles snack chips, Pampers diapers, Oil of Olay cosmetics and Vicks cold remedies.
The company also produces the popular soap operas "As The World Turns", "Guiding Light", and "Another World". The company is the developer of Olestra, a controversial fat substitute used in snacks and crackers.
Shares of P& G (PG) were up 1-1/2 at 89-5/8 in mid-morning trading Thursday on the New York Stock Exchange. The stock's 52-week high is 94. 
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Procter & Gamble
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