Procter & Gamble Profit Rises; Increases Sales of Staples

Procter & Gamble Co. increased sales of staples from laundry detergent to toothpaste in its most recent quarter, sending shares higher despite a warning that growth will be spotty in the months ahead.

The maker of Gillette razors and Pampers diapers on Tuesday posted an unexpected rise in profit in the latest quarter and reported organic sales -- a closely watched metric that strips out currency moves, acquisitions and divestments -- grew 3%, the biggest increase is more than a year.

"We're pleased with the progress we're making, but there is still more work to do to get back to the levels of balanced top- and bottom-line growth and cash generation," Chief Executive David Taylor said. He pointed to organic sales growth across all product categories as well as strong cost savings.

Shares of the company were up about 4.5% in morning trading to $87.85.

P&G -- which has struggled for years to accelerate sales growth and has underperformed smaller, nimbler rivals -- has been slashing costs and commanding higher prices. The results come at a time when consumer products companies are grappling with uncertainty in emerging markets, currency swings, and rising commodity prices.

P&G Chief Financial Officer Jon Moeller cautioned that the sales bump doesn't change the company's forecast that organic sales will grow just 2% for the fiscal year that ends next June.

"We continue to face a relatively slow-growth, volatile world," Mr. Moeller said. "Progress does not come in a straight line."

All five of P&G's segments recorded core volume improvement -- 2% in beauty, 3% in grooming, 5% in health care, 4% in fabric and home care and 4% in baby, feminine and family care.

Growth in health care was driven largely by sales of Oral-B electric toothbrushes. Sales improved in the U.S. and China, P&G's two biggest markets, while the company struggled in the United Kingdom.

Overall pricing remained flat while volume improved 2%. Excluding acquisitions and divestitures, core volume rose 3%.

In all for the latest quarter, P&G reported a 4.2% increase in profit to $2.71 billion from a year ago. Revenue was essentially flat at $16.5 billion.

The company backed its 2017 forecast for per-share earnings growth in the mid-single digits from fiscal 2016 and sales growth of about 1%.

Write to Sharon Terlep at sharon.terlep@wsj.com and Anne Steele at Anne.Steele@wsj.com