P&G quarterly profit jumps on sale of snacks business

Procter and Gamble, the US consumer-products giant, on Friday posted a sharp rise in earnings for its fiscal fourth quarter, boosted by the sale of its snacks business. P&G said net profit rose 45 percent from the year-ago quarter to $3.6 billion. The sale of its Pringles potato-chip business to The Kellogg Company for $2.7 billion in an all-cash transaction added a net gain of 48 cents per share, P&G said. Excluding one-time items, earnings per share were 82 cents in the April-June quarter, well above the average analyst estimate of 77 cents. Net sales fell 1.0 percent to $20.2 billion, slightly missing expectations of $20.3 billion. P&G, the maker of Gillette razors, Tide laundry detergent, Crest toothpaste and other consumer products, said the decline was primarily due to a negative foreign exchange impact, which reduced sales by four percent. The Cincinnati, Ohio-based company, which has a presence in about 180 countries, has been battling rising commodity costs and a stronger dollar. Sales growth increased in four of the company's five business segments compared with a year ago. "Despite a difficult macro environment, we see significant opportunities for top- and bottom-line growth," said chief executive Bob McDonald in a statement. "We enter fiscal 2013 with very strong developing market momentum, strengthened plans on our core developed market business, and with the benefit of a $10 billion cost-savings program, which is well under way," he said. For its first fiscal quarter, from July to September, P&G predicted earnings per share of 83 cents to 91 cents and net sales growth down as much as six percent. "A major driver of the lower first-quarter EPS outlook is foreign exchange, which is forecast to reduce net earnings by five to six percent versus the prior year," it said. The company said it will repurchase $4 billion in P&G stock during the fiscal year. Shares in P&G were up 0.9 percent at $63.51 in pre-market trade in New York.