Profits rise at Procter & Gamble

Procter & Gamble, the world’s largest consumer-products maker, said profit in its first quarter rose 7.6 per cent as sales of homecare goods and baby products gained.

Net income rose to $3.03 billion, or $1.04 a share, from $2.81 billion, or 96 cents, a year earlier, P&G said yesterday.

Rehired chief executive AG Lafley is working to reduce costs and introduce new products after returning in May to revive growth at the maker of Tide detergent, Crest toothpaste and Pampers diapers.

While he's still struggling to accelerate sales gains in beauty products, price cuts and increasing spending on marketing have helped P&G regain ground from Unilever in other categories.

Sales rose 2.2 per cent to $21.2 billion.

The company repeated its forecast that earnings excluding some restructuring charges will increase 5 per cent to 7 per cent this year.

Sales excluding the effects of currency fluctuations as well as acquisitions and divestitures in P&G’s fabric and homecare unit rose 6 per cent. The segment produced almost one-third of the company’s sales last year.

Sales of baby, feminine and homecare products also rose 6 per cent. Sales of beauty products grew 1 per cent.

A scare over dogs contracting salmonella hit sales over the summer after it recalled several pet food products that could have been contaminated.

Net sales at its healthcare division, which includes pet food, fell by 1 per cent in the quarter to the end of September due to the recalls. That was a sharp reverse from a 6 per cent rise in the previous quarter. Analysts said its pet food brands were likely candidates for divestiture. Mr Lafley has said he was ready to divest businesses in unattractive sectors.

P&G stopped making food for humans when it sold the Pringles crisps business to Kellogg for $2.7 billion last year. – Copyright The Financial Times Limited 2013/ Bloomberg