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P&G scrubs up 4Q profit
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July 29, 1999: 11:09 a.m. ET
Cost-cutting, higher prices push detergent maker's net above estimates
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NEW YORK (CNNfn) - Procter & Gamble Co. Thursday credited higher prices for some of its household products and savings from a cost-cutting program for a 16 percent boost in its fiscal fourth-quarter earnings, which exceeded analysts' forecasts.
Profit from operations at the biggest U.S. producer of personal and household items rose to $799 million, or 55 cents a diluted share, from $686 million, or 47 cents, in the year-earlier period. Analysts polled by First Call Corp. had anticipated earnings of 53 cents a share in the latest quarter.
A $385 million restructuring charge due to company's "Operation 2005" cost-cutting plan reduced the latest-quarter net income to $414 million, or 29 cents a share. Under the previously announced plan, the company will eliminate 15,000 positions worldwide and close about 10 plants.
Sales rose 2 percent to $9.45 billion.
Higher prices for new products, including a new line of hair and skin products, and newly improved household cleaners helped boost earnings for the quarter, said P&G President Durk Jager. "We are pleased with our continued earnings performance despite economic difficulties in key emerging markets and the impact of currencies around the world," he said.
About half of Cincinnati-based P&G's sales come from overseas markets, including Asia, Europe and parts of Africa. Falling currencies in Europe and Brazil during the quarter and the expense of translating those profits into U.S. dollars hurt sales by about 1 percent during the quarter, P&G said.
For its fiscal year, P&G said net income -- including the restructuring charge -- was little changed at $3.76 billion, or $2.59 a diluted share, from $3.78 billion, or $2.56 a share, a year earlier. The share-net increase was due to a reduction in shares outstanding. Sales rose 3 percent to $38.13 billion.
P&G (PG) -- maker of such well-known products as Tide detergent, Ivory soap, Crest toothpaste, Pampers disposable diapers and Pringles potato chips -- rose 1 to 87-1/8 in Thursday midmorning trade.
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Procter & Gamble
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