P&G Shares Fall 4% as Outlook Declines

by Christopher Freeburn | April 27, 2012 2:33 pm

Consumer product giant Procter & Gamble (NYSE:PG[1]) lowered its full year outlook[2] citing weak markets, increased commodity costs and pricing competition from rivals.

P&G shares were down more than 4% in Friday afternoon trading.

The company said earnings for its fiscal third quarter dropped to $2.41 billion, down from $2.87 billion last year. EPS came in at 82 cents, compared to 96 cents during the same period in 2011. Overall sales inched up 2% to $20.2 billion.

Excluding charges related to its ongoing restructuring plan, EPS were 94 cents, modestly beating analysts’ average forecast of 93 cents a share.

The company lowered its full fiscal-year EPS prediction from between $3.93 to $4.03, to between $3.82 to $3.88, falling short of a $3.96-per-share forecast by analysts. EPS for the fourth quarter is estimated to be between 79 cents to 85 cents a share.

Additionally, company officials said new laws forced it to reduce prices in Venezuela, which generates $1 billion in annual sales, by up to 25%.

Analysts cited by Reuters sharply questioned[3] company management during a conference call over the reduced forecast, wondering if anyone at the company was “taking responsibility” for the sliding results.

CEO Bob McDonald blamed weak markets in developed countries and a failure to develop new products, especially in the U.S. beauty care market, for the company’s diminish forecast.

After raising prices by $3.5 billion this year, the company found that not all competitors were following suit. As a result, the P&G is rolling back some of those price increases, including on laundry detergent, oral care products, dishwasher detergent, and blades and razors.

  1. PG: http://studio-5.financialcontent.com/investplace/quote?Symbol=PG
  2. lowered its full year outlook: http://www.reuters.com/article/2012/04/27/us-procter-idUSBRE83Q0IV20120427?feedType=RSS&feedName=topNews&rpc=71
  3. sharply questioned: http://www.reuters.com/article/2012/04/27/us-procter-idUSBRE83Q0IV20120427?feedType=RSS&feedName=topNews&rpc=71

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