CINCINNATI Procter & Gamble (PG) says its first-quarter net income rose 8 percent as world's largest consumer products company sold more of its detergent and diapers globally and cut costs.
The results were in line with Wall Street expectations.
The Cincinnati-based company, whose products range from Tide detergent to Crest toothpaste and Gillette razors, is in the midst of a turnaround plan that includes focusing on its most profitable core businesses and cutting costs to save $10 billion by fiscal 2016.
In the developed markets such as the U.S. and Europe, P&G has been trying to adjust its prices to stay competitive, cutting prices on some products and raising prices on others. P&G said it held or grew market share in two-thirds of its product categories globally.
"P&G's first quarter results were consistent with our plans and expectations, putting us on track to deliver our goals for the fiscal year," said CEO A.G. Lafley in a statement.
Net income for the three months ended Sept. 30 after paying preferred dividends rose to $3.03 billion, or $1.04 per share. That compares with net income of $2.81 billion, or 96 cents per share, last year. Excluding one-time items net income was $1.05 per share, matching analyst expectations, according to FactSet.
Revenue rose 2 percent to $21.2 billion from $20.74 billion. Analysts expected revenue of $21 billion.
Total volume rose 4 percent as increases in beauty, fabric care and home care, and baby, feminine and family care categories was offset by declines in grooming and health care.
P&G reiterated its 2014 guidance of earnings excluding one-time items to rise 5 percent to 7 percent, implying results of $4.25 to $4.33 per share. It expects revenue to rise 1 percent to 2 percent, implying revenue of $85 billion to $85.85 billion. Analysts expect earnings of $4.29 per share on revenue of $85.71 billion.
Oppenheimer & Co. Joseph Altobello said that while he is "encouraged" by "healthy" growth in sales and volume, P&G's turnaround will take time, and the future improvement is already reflected in the stock price. He kept his "Perform," rating on the stock.
Shares slipped 40 cents to $80.21 in premarket trading about 30 minutes ahead of the opening bell. The stock has risen 19 percent since the beginning of the year.