P&G; Says Annual Profit to Beat Forecasts
Procter & Gamble Co., the largest U.S. household goods maker, said fiscal first-quarter earnings fell 4.4% but annual profit will top forecasts because of lower costs for labor and raw materials.
Net income for P&G;, maker of Pampers diapers and Folgers coffee, fell to $1.1 billion, or 79 cents a share, from $1.16 billion, or 82 cents, a year earlier. Excluding restructuring spending, profit in the period ended Sept. 30 topped estimates by 2 cents. Sales fell 2% to $9.77 billion.
A.G. Lafley, Procter & Gamble’s chief executive since June 2000, is cutting 9,600 jobs to cut costs as sales declined for a fourth straight quarter. Cost savings are increasing from fewer employees, online purchasing of supplies and lower prices for paper pulp, coffee and energy even as sales slow, company officials said.
Excluding $238 million in restructuring costs, profit would have been $1.34 billion, or 96 cents a share, the Cincinnati-based firm said. On that basis, per-share earnings exceeded the 94-cent average estimate of analysts surveyed by Thomson Financial/First Call.
Procter & Gamble shares rose $2.90, or 4.1%, to close at $74.20 on the New York Stock Exchange. The stock has fallen 3.5% in the last year, compared with a 24% decline in the Standard & Poor’s 500 index.
The company said fiscal 2002 earnings will be $3.40 to $3.50 a share, at the upper end of estimates, excluding costs for restructuring. The average estimate was $3.40, according to First Call.
At a Glance:
* Chubb Corp., the No. 6 U.S. business insurer, posted a third-quarter loss because of claims from the attacks that destroyed the World Trade Center. The Warren, N.J.-based company’s net loss was $239 million, or $1.40 a share, contrasted with net income of $207.9 million, or $1.17, a year ago. Chubb’s share of claims from the Sept. 11 attacks was $600 million.
* Kellogg Co. said third-quarter net earnings were $150.3 million, or 37 cents a share, compared with $181.9 million, or 45 cents, a year earlier. Excluding the cost of integrating cookie and cracker maker Keebler Foods Co., earnings per share were 40 cents. When taking that cost into account, Kellogg’s third-quarter earnings exceeded analysts estimates by 3 cents a share. Sales for Battle Creek, Mich.-based Kellogg were $2.59 billion in the third quarter, compared with $1.85 billion a year earlier. If Keebler’s results are included, sales declined 3%.
* Newell Rubbermaid Inc. said third-quarter net income fell to $83.5 million, or 31 cents a share, from $123 million, or 46 cents, a year earlier. Excluding charges, including $12.6 million for restructuring, earnings were 34 cents a share --a penny higher than estimates. Sales at the Freeport, Ill.-based housewares maker edged up 0.7% to $1.77 billion.
* Jenny Craig Inc. reported net income of $24 million, or $1.16 a share, for the first quarter of fiscal 2002, contrasted with a net loss of $1.7 million, or 8 cents, last year. The La Jolla-based weight management company said revenue rose 11% to $73.9 million.
* PacifiCare Health Systems Inc., benefiting from cost controls and exiting unprofitable markets, said third-quarter profit more than tripled to $17 million, or 50 cents a share, from $5.2 million, or 15 cents a share, a year earlier. Revenue rose 2.4% to $2.96 billion. The Santa Ana-based company was expected to earn 34 cents a share, according to analysts.
* Zenith National Insurance Corp. reported a third-quarter net loss of $19.3 million, or $1.10 a share, compared with a net loss of $12.2 million, or 71 cents a share, last year. The Woodland Hills-based insurer said revenue increased 49% to $169 million.
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