Gillette Profit Rises 13% on Razor, Battery Sales

Gillette Co., which agreed last week to be acquired by Procter & Gamble Co. for about $57 billion, said fourth-quarter profit rose 13%, helped by sales of M3Power razors and Duracell batteries.

Net income at the world’s largest razor maker increased to $415 million, or 41 cents a share, from $368 million, or 36 cents, a year earlier, Boston-based Gillette said. Revenue climbed the most in eight years, jumping 19% to $3.11 billion.

Chief Executive James Kilts closed plants and used the savings to increase advertising on shavers and razors, for which sales grew 16%. The acquisition by Procter & Gamble will give Gillette access to a larger distribution network, helping it gain market share with other products such as oral care.

Gillette’s profit was expected to be 42 cents a share, the average forecast of 15 analysts surveyed by Thomson First Call.

Shares of Gillette fell 30 cents to $50.40 on the New York Stock Exchange.

Kilts should get at least $185 million in stock and cash after Procter & Gamble completes its acquisition, the Wall Street Journal reported. That exceeds the $153 million previously estimated according to a compensation package that Gillette confirmed, the Journal said.

Massachusetts Secretary of the Commonwealth William Galvin has started a probe into P&G;’s purchase of Gillette, citing concern over whether Kilts’ compensation might have been a motivation for the sale.

Gillette spokesman Eric Kraus didn’t return calls.

Kilts has grown the razors and blades unit, which accounts for more than half of Gillette’s profit, through a steady stream of new Mach3 products, the world’s bestselling line of men’s razors. This has helped Gillette maintain its lead over Energizer Holdings Inc., which introduced the first four-blade Quattro men’s shaver in September 2003.

Gillette has more than 70% of the global market for razors and blades. The company added a racing-themed Mach3Turbo Champion razor in September 2003 to extend its Mach3Turbo line and introduced the three-bladed Sensor shaver in March 2004 and M3Power in May.