P&G Sees Profit, Sales in Line With Forecasts

NEW YORK – Procter & Gamble Co. (PG) Thursday said it is comfortable with the average analysts' estimate calling for an 11.5 percent earnings per share increase in the current quarter, citing sales across its product lines.

The company also stood by its prior forecast for expected sales growth at a high-teens percentage rate for the current fiscal fourth quarter.

P&G shares, which have been trading at a four-year high, edged down less than 1 percent.

Cincinnati-based P&G said it was comfortable with the current consensus forecast which increased by a penny a share since the company's prior quarterly outlook in April.

One analyst said the outlook represents a slight increase from P&G's forecast in April, when it said it was comfortable with estimates that were a penny lower.

"You can call it a stealth guidance upward revision," said Joseph Altobello, analyst at CIBC World Markets. He rates the stock "sector outperformer."

Analysts on average forecast earnings of 97 cents a share in the fiscal 2004 fourth quarter ending June 30, up from 87 cents per share, excluding restructuring costs, a year earlier, according to Reuters Estimates. Sales are estimated to rise nearly 18 percent to about $12.85 billion from $10.92 billion a year earlier.

The consumer products maker has ridden strong sales of everything from Tide laundry detergent (search) to Prilosec (search) heartburn pills — as well as the benefits of the weaker dollar and acquisitions — to double-digit earnings gains in recent quarters.

In the fourth quarter, P&G cited continued strength in its traditional products and sales from new products like Mr. Clean AutoDry (search), a car washing system, as helping revenue growth.

The company also cited rapid growth in developing markets and the acquisition of the Wella hair-care business for boosting sales.

But Altobello said at some point it will be tougher for P&G to keep this pace of sales and earnings improvement and that it is likely to settle into its long-term target range of mid-single-digit sales growth and low double-digit earnings growth.

"I would say it's going to get tougher as we go along. At some rate you've got to believe that growth rate will moderate a bit," Altobello said.

Still, that level of improvement would represent "the consistency that investors look for."

P&G shares were down 66 cents or 0.6 percent at $110.10 on the New York Stock Exchange (search).