Procter & Gamble Gives a Muted Outlook

Procter & Gamble Co. gave weak guidance for its new fiscal year and said sales in the latest quarter dropped more than expected, hurt by currency effects. Shares dropped 4.1% in early trading to $77.35. For the year ending in 2016, P&G said it expects earnings to be in a range of "slightly below" last year's $3.77 a share to "up mid-single digits." Analysts, meanwhile, had called for earnings of $4.18 a share. P&G also said it sees foreign exchange cutting into overall sales by 4 to 5 percentage points, and it forecast organic sales in line with last year's results to up low-single digits. The consumer products giant is in the middle of a transition. At the beginning of the month, it said it would carve off brands including Wella shampoos, Clairol hair dye and CoverGirl makeup and merge them with Coty Inc. in a complicated $13 billion deal. Then, it reported that Chief Executive A.G. Lafley will be stepping down. He will be succeeded by 35-year company veteran David Taylor, who will take over as CEO on Nov. 1, with Mr. Lafley shifting to the role of executive chairman. In the latest quarter, total unit volume was down 1%, with volume down 4% in its beauty and personal care segment, down 3% in grooming, and up 1% in the fabric segment. Organic sales were flat, as a three percentage point benefit from pricing and mix was offset by lower shipment volume. Overall, the company reported earnings of $521 million, or 18 cents a share, down from $2.58 billion, or 89 cents a share, a year earlier. Excluding certain items, earnings were $1 a share. The company took a more than $2 billion write-down on an accounting change for its Venezuelan operations. Revenue fell to $17.79 billion from $19.6 billion. Analysts had expected per-share earnings of 95 cents and revenue of $17.98 billion, according to Thomson Reuters.