CINCINNATI – Consumer products company Procter & Gamble Co.(PG) on Tuesday raised its profit expectations for its fiscal second quarter, saying it sees earnings coming in at the higher end of its previous outlook because of better sales and lower-than-anticipated costs for its acquisition of Gillette Co.
The maker of Pampers and Pantene said it now expects earnings of 68 cents to 69 cents per share for the quarter ending this month. The outlook is toward the top end of Procter & Gamble's previously forecast for a profit of 66 cents to 69 cents per share.
Procter & Gamble traced the change to lower-than-expected costs in the quarter from its October acquisition of Gillette, which it now believes will cut second-quarter earnings by 8 cents to 10 cents per share. The company previously expected dilution of 9 cents to 12 cents per share from the deal.
The acquisition overall is still expected to reduce full-year earnings by 20 cents to 26 cents per share.
Analysts, on average, are forecasting second-quarter earnings for Procter & Gamble of 67 cents per share on sales of $18.26 billion, according to Thomson Financial.
Cincinnati-based Procter & Gamble said it sees better sales for the quarter due to strong results from both its own business and Gillette, with growth expected at 25 percent to 26 percent. The company previously forecast sales growth of 23 percent to 26 percent.
Organic sales growth, or growth that doesn't include recently acquired businesses, is now expected at 6 percent to 7 percent, led by the household care and beauty businesses.
Gillette is also expected to deliver stronger sales growth than previously expected. Procter & Gamble previously anticipated flat to low-single digit sales growth for the unit.
Shares of P&G rose $1.33, or 2.2 percent, to $58.24 in trading on the New York Stock Exchange. The stock has traded between $51.16 and $59.56 in the past 52 weeks.
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