Procter & Gamble today (30 January) posted a 7% drop in quarterly underlying net earnings amid a "mid-single-digits" fall in snacks volumes.

The US-based consumer goods giant reported second-quarter net earnings from continuing operations of US$2.96bn for the three months of to 31 December.

Underlying net earnings from P&G's snacks and pet care division, which includes the Pringles brand, fell 6% to $63m.

Net sales from the division dipped 1% to $800m due in part to the impact of currency conversion and a 5% fall in volumes. On an organic basis, sales were up 4%, although "supply constraints" in North America meant snacks volumes were down on the year.

P&G's group net sales fell 3% to $20.4bn due to "unfavourable" foreign exchange and lower volumes. Organic sales rose 2%.

On a reported basis, P&G's second-quarter net earnings jumped 53% on the back of the sale of its Folgers coffee business to J.M. Smucker in November.

"As expected, this was a particularly challenging quarter," said P&G chairman and CEO A.G. Lafley. "Despite this, we grew organic sales 2% and delivered against our going in EPS guidance. We expect the environment will remain difficult and highly volatile - at least in the near term."

Diluted net earnings per share increased 61% to $1.58 for the quarter.

Looking ahead to the full year, P&G said total sales growth is expected to be "flat to negative 4%" due in part to falling volumes and "highly volatile" foreign exchange. The company forecast organic sales growth of 2-5%.

P&G added that it was "comfortable" with analysts' current consensus earnings per share estimate of $4.29. The company has forecast earnings per share of $4.20-4.35 for its fiscal 2009 year.