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P&G to take $1.2B charge
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June 15, 2001: 10:47 a.m. ET
Restructuring costs more than expected; 4Q, '02 guidance confirmed
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NEW YORK (CNNfn) - Procter & Gamble Co. Friday confirmed it expects to hit earnings estimates for the current quarter and the coming fiscal year, but said a restructuring of its business will cost more than expected.
The maker of Pampers diapers, Ivory soap and other products said the restructuring will cost $900 million, up from the previous estimate of $400 million to $800 million. It said it expects a total of $1.2 billion in charges for the latest quarter, resulting in a net loss.
It expects after-tax savings of $600 million to $700 million annually by 2004 from the program.
Analysts surveyed by earnings tracker First Call forecast the company's earnings excluding special items will be 59 cents a share for its fourth quarter ending in June, up from 55 cents a share a year earlier. The company said it comfortable with current estimates.
Shares of P&G (PG: down $2.03 to $62.83, Research, Estimates), a component of the Dow Jones industrial average, lost ground on the announcement.
The company said it expects earnings per share growth in its next fiscal year greater than this year's growth, which would put the results ahead of current Wall Street forecasts.
Estimates of $3.11 a share for this year, if achieved, would be 5 percent above last year's results, and growth of more than 5 percent in the next fiscal year would put P&G's results ahead of current forecasts of $3.27 a share for 2002.
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The company's said the current guidance excludes any impact on results from the Clairol acquisition, the planned venture with Coca Cola Co. (KO: down $0.40 to $44.62, Research, Estimates), the Crisco/Jif divestiture or accounting changes associated with goodwill. 
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Procter & Gamble
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