CHICAGO – Procter & Gamble Co. (PG) on Thursday backed its quarterly profit outlook, helped by sales of new products and continued gains in developing markets.
The maker of Charmin toilet paper and Iams pet food said it sees profit for the fiscal first quarter ending this month in line with analysts' average estimate of 72 cents a share.
For the second consecutive quarter, the company did not increase in its forecast during a mid-quarter update. The rosy updates had become routine in previous quarters.
"In recent years, the company had gotten itself into a cycle of underpromising at the start of a quarter, and then raising guidance in its mid-quarter update. We believe that cycle is now over and applaud the change," Lauren Lieberman, an analyst at Credit Suisse First Boston (search), said in a research note. Lieberman rates the stock "neutral."
P&G said it expects sales, excluding acquisitions and currency fluctuations, to rise 4 percent to 6 percent, with unit volume up in the high-single digits on a percentage basis.
Increased sales in developing markets like Central Europe have also helped.
Total sales are expected to increase in the low double digits, the company said. That includes a 2 percent to 3 percent boost from the weaker dollar, which lifts the value of sales outside the United States when they are posted on P&G's income statement in dollars.
Sales also include a 4 percent to 5 percent increase from acquisitions, primarily the Wella hair care business.
The positives were partially offset by a 2 percent to 3 percent decline in "price mix" due to increased sales in developing markets, which are typically lower-priced items.
Shares of the Cincinnati-based company have traded at their highest levels in almost five years, with investors cheered by strong sales growth across most of its product lines and a boost from acquisitions like Wella.
The stock fell 13 cents to $56.60 Thursday on the New York Stock Exchange (search).