Restructuring Costs Lead P&G; to 1st Quarterly Loss in 8 Years

Consumer products giant Procter & Gamble Co. reported its first quarterly loss in eight years after paying for massive job cuts and efforts to improve its food, fabric-care and cosmetics lines.

But operating earnings came in at the high end of analysts’ expectations amid growing sales at P&G;’s health-care division, which includes Iams pet food and new products such as the battery-operated Crest SpinBrush.

“They’ve got their arms around the problems,” said David Kolpak, managing director at Victory Capital Management. “Their problems were that their prices were out of line with the lower-priced competition and they fell behind on the innovation curve.”

P&G;, whose brands include Ivory soap, Tide laundry detergent and Tampax tampons, posted a net loss of $320 million, or 23 cents a share, for its fiscal fourth quarter, contrasted with profit of $516 million, or 36 cents, a year ago.

The latest results include an after-tax restructuring charge of $1.16 billion in the latest quarter, bringing to $4.4 billion the total charges for restructuring that began in 1999.

The company’s operating earnings, which exclude the restructuring items, rose 7.7% to $837 million, or 60 cents a share, from $777 million, or 55 cents, a year earlier. Analysts were expecting 58 to 60 cents a share, with an average of 59 cents, according to Thomson Financial/First Call.

For the last year, P&G; has continued to cut costs and jobs and tried to regain market share by focusing on core brands. In March, the Cincinnati-based company announced plans to slash an additional 9,600 jobs on top of 6,800 layoffs in 1999.

Sales fell less than 1% to $9.58 billion. P&G; said revenue rose 4%, excluding the unfavorable impact from foreign exchange and the impact from phasing out products such as Olay cosmetics.

P&G; shares fell 14 cents to close at $70.61 on the New York Stock Exchange.

Other earnings, excluding one-time gains or charges unless noted:

* Barr Laboratories Inc. said its profit more than doubled to $18.5 million, or 49 cents a share, in its fiscal fourth quarter and said earnings in the current quarter will beat estimates because of the introduction of its generic version of the antidepressant Prozac. Earnings in the most recent quarter included a charge of $1.5 million, or 4 cents a share, for legal fees associated with Prozac litigation. Revenue grew 25% to $140.9 million.

* BP said second-quarter profit rose 5.2% to $3.8 billion, or 17 cents a share, on higher prices for natural gas and gasoline, exceeding analysts’ expectations of $3.6 billion in profit. BP, North America’s largest natural-gas producer and the world’s third-largest oil company, also reiterated its forecast for growth in oil and gas output of 5.5% this year. BP also boosted its quarterly dividend by 4.8% to 5.5 cents a share.

* Emerson Electric Co., the top maker of power supplies for telecommunications and computers, said third-quarter profit fell 12% to $330.4 million, or 77 cents a share. Sales fell 3.4% to $3.9 billion. The company said it will cut an undisclosed number of jobs and close some plants to reduce costs. Emerson has cut its work force by as many as 2,400 jobs, or 6% of its salaried work force, since the beginning of the year.

* MetLife Inc., the No. 1 U.S. life insurer, said second-quarter earnings rose 12% to $419 million, or 54 cents a share, a penny better than analysts’ expectations, as it trimmed expenses. Revenue fell 2% to $7.94 billion.

* StarMedia Network Inc. said its second-quarter loss narrowed to $30.6 million, or 41 cents a share, from $41.5 million, or 63 cents, a year ago, boosted by cost cutting. Analysts were expecting a 47-cent loss. The Internet media company also said Fernando Espuelas will step down as chief executive and be succeeded by President Enrique Narcisco. Espuelas will remain chairman. Revenue rose 3% to $14.2 million, missing analysts’ expectations of $15.1 million, amid the advertising slump.