NEW YORK (CNN/Money) - Procter & Gamble reported a higher fourth-quarter profit Monday, beating Wall Street expectations thanks to higher sales of beauty and health-care and fabric-care products.

P&G is coming off a year in which substantial job cuts and other streamlining measures have finally given a boost to the company's bottom line. P&G also has been able to boost sales volume of its popular brands such as Tide laundry detergent, Crest toothpaste, Pampers disposable diapers and Bounty paper towels. It also managed to bring capital spending below 5 percent of sales.

The company's stock has had a big run-up since last September's terrorist attacks as consumers continued to buy basic necessities such as food and household products. P&G's shares are up 35 percent since Sept. 21. The stock jumped 20 percent in just the two weeks leading up to its fourth quarter earnings report as investors anticipated a strong quarter.

"The key risks to the story are price and margin pressure from retail consolidation and competition," Morgan Stanley analyst Catherine Lewis said. However, P&G's strength in inventory management combined with its global brands, could offset any pressure from consolidation, she added.

Despite the improved picture, investors sent the stock lower Monday. Shares of Cincinnati-based P&G (PG: Research, Estimates) tumbled 1.85 to 87.99 in early trading Monday after heading slightly higher in before-hours activity the report.

Part of the stock's decline is attributable at least in part to investor anticipation of Monday's earnings report. But at least one analyst blames the falloff on the company's cautious outlook going forward.

Banc of America analyst William Steele told CNN/Money that P&G will book a gain of 9 cents a share in the first quarter following the sale of its Comet brand. That will make for a tough comparison in the second quarter, in which P&G is striving to grow earnings by 10 percent.

For the latest quarter, P&G said it earned $1.09 billion, or 77 cents a share, up from $891 million, or 63 cents a share, a year earlier. Analysts polled by earnings tracker First Call anticipated earnings of 75 cents a share.

Sales in the fourth quarter increased to $10.2 billion from $9.6 billion. The company also forecast both first quarter and 2003 sales to increase 4-to-6 percent.

P&G posted a net quarterly profit, which included a $175 million restructuring charge, of $910 million, or 64 cents a share, compared with a net loss of $320 million, or 23 cents a share, a year earlier.

Chief Financial Officer C.C. Daley told investors during a teleconference Monday that the improved results came ahead of schedule, and said that measure had been taken to ensure accurate financial reporting in the wake of high-profile accounting scandals that have beset several large companies in recent times.

The company also plans to begin counting stock options as a compensation expense in fiscal 2003.

"We acknowledge stock options represent a benefit to employees and that recognizing them as a compensation expense is appropriate," Daley said.

The company logged higher sales of beauty, fabric-care and other products, but noted that cost-cutting also helped boost the bottom line.

"Our business results continue to be strong behind our focused strategies of improving consumer value, investing behind core brands and driving cost savings to the bottom line," CEO A.G. Lafley said in a statement.

For the full year, the company earned $5.06 billion, or $3.59 a share, in line with Wall Street forecasts, according to First Call. In the prior year, P&G earned $4.6 billion, or $3.25 a share.

For the first quarter, P&G expects 8-to-10 percent volume growth with sales growing 4-to-6 percent. The company expects earnings-per-share growth of 11-to-15 percent from the year earlier, which is roughly in line with expectations. Volume is the amount of individual pieces shipped excluding price and currency effects.

The company also said volume growth for the entire year would expand modestly ahead of sales. Sales growth is expected in the 4-to-6 percent range with earnings per share showing double-digit percentage growth.