Solid third-quarter earnings from consumer products giant Procter & Gamble and cereal maker Kellogg Co. on Tuesday proved again that people are still buying basic goods even as the economy slows.

In what Wall Street expects to be the worst earnings period in a decade, consumer staples companies in the Standard & Poor's 500 index have so far this quarter reported a 6 percent increase in profits, double the already healthy 3 percent growth expected by analysts surveyed by research firm Thomson Financial/First Call. 

And profit growth for the sellers of food, beverages and tobacco is in sharp contrast with the 19.1 percent decline in profits seen for the 409 S&P 500 companies that have reported in the quarter to date. 

"They are safe havens," said John Miller, an industry analyst at Chicago-based Ariel Capital Management which has $6 billion in assets. "They have reported consistent revenue and earnings growth despite the economic environment they operate within." 

And "the economic picture is somewhat frightening now but I think they should continue to show consistent results," he said. 

Cincinnati-based Procter & Gamble said its fiscal first-quarter core earnings beat analysts' consensus estimate by 2 cents. 

The maker of products including Tide laundry detergent, Crest toothpaste and Folgers coffee said net income was weighed down by restructuring charges and lower sales but boosted by cost-cutting efforts and lower materials costs. It also said overhead cost reductions are speeding up. 

Kellogg Ups Outlook 

Battle Creek, Michigan-based Kellogg, second only to General Mills Inc. among big U.S. cereal makers, said sales declined as the company was hurt by the cost of integrating cookie maker Keebler and by a strong U.S. dollar abroad. But core earnings in the quarter still beat Wall Street's expectation by 3 cents. 

Kellogg also said it expects full-year earnings of $1.33 a share before one-time items, better than the $1.29 per share average expectation of analysts surveyed by First Call. 

The largest U.S. pet food maker, Ralston Purina Co., also reported on Tuesday. Driven by solid sales volumes in its main pet foods segment, it met expectations of 32 cents a share. 

Freeport, Illinois-based household and business products maker Newell Rubbermaid Inc. posted earnings that fell 27 percent in the third quarter although sales rose slightly. Third-quarter earnings were in the lower end of the company's expectations set in August but beat analysts' consensus forecast by a penny. 

Not All Earnings Are Good News 

Companies in the S&P 500 are expected to see earnings drop by 21.7 percent, according to First Call, down from the 14.7 percent drop forecast on Sept. 1. 

Some other earnings reports on Tuesday were dismal. 

US Airways, the No. 6 U.S. carrier, missed the consensus estimate by $2.09 a share, and Chubb Corp., one of the leading U.S. business insurers, posted earnings per share 28 cents below the forecast, according to First Call. 

US Airways reported a net loss of $766 million, battered by the lingering economic slump and the sharp decline in air travel after the Sept. 11 attacks. 

Chubb said it paid out claims totaling $420 million related to the attack on the World Trade Center, leaving the company with a net loss for the third quarter. 

Troubled life insurance and loan group Conseco Inc. posted a net loss on Tuesday as it took charges for writing down the value of some investments and covering the cost of bad loans. Its earnings excluding one-time charges were 2 cents below the consensus estimate, said First Call. 

Of the 409 S&P 500 companies, that have reported quarterly results so far, 226, or 55 percent have beaten estimates, while 119 have matched them and 64 have missed them. 

Although analysts have been lowering their earnings forecasts for the quarter, the percentage of S&P 500 companies that beat estimates is behind the norm, according to First Call. Typically, 58 percent of S&P companies exceed expectations. 

This week will be light, with just 40 S&P 500 companies scheduled to report financial results.