Alexander Coolidge reports:
Procter & Gamble Co. today reported profits rose 5 percent to $ 11.3 billion for the fiscal year ended June 30.
Sales rose 1 percent to $84.2 billion at the consumer products giant. For the fourth quarter, profits fell 48 percent to $1.9 billion, while sales rose 2 percent to $20.7 billion.
Excluding one-time items, P&G’s profits and sales beat Wall Street expectations. P&G’s stock jumped $1.50 or 1.9 percent to $81.80 in early trading this morning.
In conference calls with reporters and analysts, chief executive A.G. Lafley indicated cost-cutting may deepen, noting P&G would “strengthen and accelerate” productivity plans.
As of the end of June, P&G has cut 7,000 office jobs as the company continues its $10 billion cost-cutting campaign through 2016. Lafley said further productivity efforts would run “concurrently” with previous initiatives, not after.
“Productivity will become one of P&G’s core strengths – just like innovation,” he said, adding productivity would be “a systemic strength, not an episodic” event.
Lafley said the company would keep making “choiceful” investments in core brands, the biggest innovation opportunities as well as core developed and developing markets.
Lafley told analysts “it’s going to take a couple of years” before the company is performing to “full potential.” He said the company’s innovation and product pipeline this year was “stronger” than last year, but “not huge.”
Lafley also vowed “laser-like focus on winning with consumers.”
“We know we’re not consistently winning now, we’re committed to make changes,” he said.
Lafley, who led the company from 2000 to 2009, resumed the helm in May after former CEO Bob McDonald abruptly resigned.
Looking ahead to this fiscal year, P&G said it would grow organic sales (excluding foreign exchange, mergers, acquisitions or divestitures) by 3 to 4 percent, while overall sales would climb 1 to 2 percent. Core earnings per share (excluding one-time items) would rise 5 to 7 percent.
The company dropped quarterly guidance, but said it would update annual guidance every three months.
Wall Street analysts predicted P&G would garner a $11.8 billion profit (excluding one-time items) on annual sales of $84.2 billion and a fourth quarter profit of $2.2 billion on $20.5 billion in sales, according to Bloomberg.
P&G has struggled to maintain consistent profit and sales growth in recent years amid a worldwide economic slump. The company’s stock has lagged peers like Colgate-Palmolive and Unilever.