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P&G; Profit Climbs 23% as Sales Rise

From Bloomberg News

Procter & Gamble Co. said fiscal third-quarter profit rose 23% because of higher sales of Crest toothpaste and Pampers diapers. Earnings this quarter will rise more than forecast, the company said Monday.

Net income in the quarter ended March 31 climbed to $1.27 billion, or 91 cents a share, from $1.04 billion, or 74 cents, a year earlier, Procter & Gamble said.

Sales increased 7.6% to $10.7 billion after Procter & Gamble reduced prices on teeth-whitening kits by 30%, increased coupons for its redesigned line of U.S. diapers and promoted lower-price brands such as Gain detergent rather than Tide.

Chief Executive A.G. Lafley boosted marketing to take business from Kimberly-Clark Corp. and Colgate-Palmolive Co., using savings from cutting more than 16,000 jobs in three years.

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Shares of Cincinnati-based Procter & Gamble rose $1.55 to $90.69 on the New York Stock Exchange.

Fourth-quarter earnings, excluding restructuring expenses, will rise as much as 12%, the company said, and sales will rise 6% to 8%, the company said. Excluding restructuring costs, earnings are forecast to rise 10% to 85 cents, according to Thompson Financial. Chief Financial Officer Clayton Daley reiterated the company’s goal for at least a 10% earnings gain in the 2004 fiscal year.

Third-quarter sales were led by an 18% jump for health-care products including Crest, and 9% for Pampers and paper products. Stronger foreign currencies compared with the U.S. dollar added 3 percentage points, helped by a 23% gain in the euro in the last year. Procter & Gamble gets about half its sales overseas.

Separately, Procter & Gamble increased an offer for German hair-care products maker Wella by about 1.2% to $7.2 billion. The purchase would be its largest acquisition.

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The company also said it would delay a previously announced plan to start treating stock options as an expense starting in July until accounting standards give a clear method for determining the cost.


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