Procter & Gamble second-quarter profit soars, forecast boosted
Procter & Gamble Co's quarterly profit soared past expectations as the world's largest household products maker used higher prices and new products to reignite growth in sluggish markets such as the United States.
P&G, which makes Tide detergent, Pampers diapers and Gillette razors, also said on Friday this year's earnings should come in ahead of its earlier forecast and sales should rise at the higher end of its prior outlook.
Shares of P&G, a component of the Dow Jones industrial average , jumped to $71.64 in premarket trading from Thursday's close of $70.42.
P&G has been under pressure to improve its performance since activist investor William Ackman bought a stake of about 1 percent. Ackman has said many of the company's problems were due to top management but said in the fall he understood the board wanted to give Chief Executive Bob McDonald more time to repair years of damage.
Even before Ackman took a stake, P&G was going through a $10 billion restructuring and other changes.
The company earned $4.06 billion, or $1.39 per share, in the fiscal second quarter ended in December, up from $1.69 billion, or 57 cents per share, a year earlier.
Stripping out unusual items such as restructuring charges and acquisitions, P&G earned $1.22 per share. That topped the company's own forecast of $1.07 to $1.13 per share and analysts' average target of $1.11, according to Thomson Reuters I/B/E/S.
Net sales rose 2 percent to $22.18 billion.
P&G has been working for months to improve its structure and cut costs. It has admitted that recent products were not as strong as past successes, such as Swiffer and Crest Whitestrips.
Competitors Kimberly-Clark Corp and Colgate-Palmolive Co are trimming their ranks to contend with weak economies in the United States and Western Europe.
P&G expects fiscal 2013 core earnings of $3.97 to $4.07 per share, up from an earlier forecast of $3.80 to $4. The fiscal year ends in June.
It expects sales that strip out acquisitions, divestitures and foreign exchange fluctuations to rise 3 percent to 4 percent this year, versus a prior forecast of 2 percent to 4 percent growth.
P&G also said it now plans to repurchase $5 billion to $6 billion in stock after calling for $4 billion to $6 billion in buybacks.
(Reporting by Jessica Wohl in Chicago; Editing by Jeffrey Benkoe)