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Procter & Gamble blows past profit forecasts

In this April 27, 2011 photo, Proctor & Gamble products sit on display at a Target store in Richmond, Va.

Steve Helber/AP

Procter & Gamble Co.'s profit excluding items rose more than expected on Thursday and the world's largest household products maker maintained a key forecast for the year, which indicated it is making progress after coming under pressure from activist investor William Ackman.

P&G is cutting costs and narrowing its focus on key markets, products and countries. The company's goals and Chairman and Chief Executive Bob McDonald have been under intense scrutiny after Mr. Ackman bought shares this summer.

P&G earned $1.06 (U.S.) per share in the fiscal first quarter on a "core" basis, which excludes charges, up from $1.01 per share a year earlier. Analysts, on average, expected it to earn 96 cents per share, according to Thomson Reuters I/B/E/S.

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The company had forecast a profit of 91 cents to 97 cents per share for the quarter, which ended in September.

Earnings from continuing operations fell to $2.85-billion , or 96 cents per share, from nearly $3-billion, or $1.01 per share, a year earlier.

Mr. Ackman, whose Pershing Square Capital Management is P&G's 10th-largest shareholder, has publicly blamed P&G's top brass for high costs and declining revenue while saying that he understands the board wants to give McDonald time to repair years of damage.

Net sales fell 4 per cent to $20.74-billion, below analysts' target of $20.78-billion. Organic sales, which strip out the impact of acquisitions, divestitures and foreign exchange, rose 2 per cent.

P&G still expects to post core earnings per share of $3.80 to $4 this fiscal year. Analysts' average forecast for the year is $3.91 per share.

The company raised its GAAP earnings-per-share forecast by 17 cents to $3.78 to $4.02 to reflect a gain from the purchase of a business in Iberia, which was completed on Oct. 22.

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