Procter & Gamble Co said that profit would fall more than anticipated in the next quarter. P&G said profit should decrease to $0.69 to $0.77 per share for the current fourth quarter ending in June. Analysts expected the company to report earnings of $0.81 cents per share. In the fourth quarter of fiscal 2012, P&G earned $0.82 per share.
Chief Financial Officer Jon Moeller told analysts that the forecast is “realistic, not conservative.” Several factors were cited by the company as the reasons for the amended profit forecast. The company is experiencing weak market growth while dealing with higher marketing and other costs. Volatility in Venezuela, Argentina, Egypt, Syria and South Korea is also weighing on profits.
The company is also increasing spending to promote several new products, including new Iams pet foods and Olay skin creams, and to build the plants to produce them around the world. The company is also the maker of Pampers diapers, Gillette razors and numerous other popular consumer products. P&G is based in Cincinnati, Ohio.
In the fiscal second quarter, P&G raised its annual profit forecast and its shares jumped. Despite sales that were weaker than anticipated, the company posted a fiscal third-quarter profit that topped estimates. It then raised the bottom end of its annual forecast range by $0.02 per share. Jack Russo, an analyst for Edward Jones, said, “They’re still making progress, they’re still on the right track, it is just going to be a little more slowly than what people expected.”
However, many investors do not want to wait until 2014 for better sales increases. In February 2012, P&G announced a $10 billion restructuring which involved cutting billions of dollars in costs and eliminating hundreds of more jobs than initially anticipated. Chief Executive Bob McDonald was questioned on a conference call by analysts wanting to know why the company has not posted better sales growth more than a year into its turnaround. David Blount, co-portfolio manager of the Growth & Income Fund at Eagle Asset Management, said, “There’s a lot of frustration that they’ve been talking about a lot of actions they’ve been taking but we haven’t really seen an acceleration in the sales growth.”
