Published November 15, 2012
CINCINNATI – Procter & Gamble Co plans to trim more non-manufacturing jobs through 2016, on top of a 10 percent reduction target it should meet this year, and said it may increase stock repurchases to $6 billion from $4 billion.
Shares of P&G, a component of the Dow Jones industrial average , gained about 17 cents to $66.70 in early trading on the New York Stock Exchange.
The world's largest maker of household products laid out its latest plans on Thursday as it works to improve its structure and cut costs. Ahead of a bi-annual meeting with analysts being held this year at P&G's Cincinnati headquarters, the company also maintained its forecasts for sales and earnings for the current quarter and the fiscal year.
P&G remains on track to eliminate about 5,700 non-manufacturing jobs by the end of the current fiscal year that will end in June. It now plans to reduce another 2 percent to 4 percent of its non-manufacturing jobs each year during fiscal 2014, 2015 and 2016.
Competitors such as Kimberly-Clark Corp and Colgate-Palmolive Co are also trimming their ranks.
P&G also said that it expects to deliver annual improvement of 5 percent in its manufacturing operations, measured by the number of cases of products produced per person, per year.
Thursday's outlook comes weeks after a better-than-expected quarterly report drove P&G shares to their highest level in four years.
P&G has been under pressure to improve following the investment of activist investor William Ackman, who may want to see P&G Chairman and Chief Executive Bob McDonald pushed out of his job. Even before Ackman's involvement, P&G was proceeding with a $10 billion restructuring and other plans to strengthen operations.
On Wednesday, Ackman's Pershing Square Capital Management disclosed that it raised its combined stake in P&G by 27.4 percent to 27.9 million shares as of September 30, while Warren Buffett's Berkshire Hathaway reduced its holdings 11.4 percent to 52.79 million shares.
P&G stood by the forecasts that it gave in late October. At that time, P&G said it still expected to post core earnings per share of $3.80 to $4 this fiscal year. For the current second quarter, P&G forecast core earnings of $1.07 to $1.13 per share, with organic sales up 1 percent to 3 percent.
(Reporting by Jessica Wohl in Cincinnati; editing by John Wallace and Maureen Bavdek)