* Q3 core EPS $0.94 vs Wall St view $0.93
* FY forecast lowered on pricing issues, commodity costs
* Shares down 2.2 pct to $65.00
By Jessica Wohl
April 27 (Reuters) – Procter & Gamble Co lowered its
profit outlook for the year on Friday on weakness in developed
markets, decisions by competitors against matching its price
increases for some products, and pricing pressure in Venezuela.
At the same time, the world’s largest household products
maker is working on a new restructuring plan and continues to
feel some pressure from higher costs for commodities such as
diesel fuel, alcohol and chemicals.
Shares of P&G;, which makes Pampers diapers and Gillette
razors, fell 2.2 percent to $65.40 in premarket trading.
In developed markets, there is basically flat volume growth
in the categories where P&G; competes, Chief Executive Officer
Bob McDonald told reporters on a morning conference call.
“The CEOs I talk to basically say that they see a
decelerating trend,” McDonald said. Much of the growth that
could come in developed markets “will be share growth, because
the markets aren’t growing.”
P&G;, like many other household products makers, has raised
prices to mitigate the impact of higher commodity costs.
P&G; rolled out $3.5 billion worth of price increases this
year, but about $100 million to $200 million of them did not
stick since competitors did not match them, Chief Financial
Officer Jon Moeller said on the call.
Now P&G; is rescinding some of the increases, either by
lowering prices or keeping them the same while increasing the
size of the products. The rollbacks are coming in laundry
detergent in the United States, United Kingdom and Mexico, and
North American oral care, dishwasher detergent, and blades and
razors.
At the same time, new regulations in Venezuela forced P&G; to
reduce prices in that market — more than a $1 billion one for
the company — by as much as 25 percent, Moeller said.
PROFIT FALLS
Earnings fell to $2.41 billion, or 82 cents per share, in
the third quarter ended in March, from $2.87 billion, or 96
cents per share, a year earlier.
The company took charges for its restructuring, which calls
for eliminating 5,700 nonmanufacturing jobs and cutting $10
billion in costs by the end of fiscal 2016.
Core earnings per share, which exclude items such as
restructuring charges, were flat at 94 cents. The results topped
analysts’ expectations of 93 cents, according to Thomson Reuters
I/B/E/S.
Sales rose 2 percent to $20.19 billion.
The results came a day after rival Colgate-Palmolive Co’s
quarterly profit met analysts’ expectations, with sales
that rose slightly more than Wall Street expected.
P&G; said it now expected to post core earnings per share of
$3.82 to $3.88 for this year. Back in February, it had forecast
$3.93 to $4.03 for the year ending in June.
Analysts were looking for a profit of $3.96 per share.
P&G; outlined its restructuring plan in
February.
