Food and consumer goods group Procter & Gamble has reported an 8% rise in net sales to US$19.73bn for the second quarter, with earnings per share increasing by 17% to $0.84, ahead of analysts’ average forecasts for EPS of around $0.83.
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Organic sales, excluding the impacts of acquisitions, divestitures and foreign exchange, rose by 5%, with every segment of the company recording growth, P&G said. Meanwhile, operating profit rose by 12% to $4.35bn, on the back of sales growth and operating margin improvement. Net earnings rose by 12% to $2.86bn.
“This was another solid quarter of broad-based sales and earnings growth during a period of heavy Gillette integration activity,” said chairman, president and CEO A.G. Lafley. “The results this quarter and a positive outlook for sales and margin improvement give us confidence to raise our top and bottom line guidance for the fiscal year.”
P&G’s snacks, coffee and pet care division saw net sales increase by 3% to $1.25bn. Volumes for the division were up by 1%, with “mid-single-digit growth” in coffee. The company said that coffee volumes grew as a result of a base comparison period last year that was negatively affected by the impact of Hurricane Katrina, and behind solid results for the Folgers Simply Smooth and Gourmet Selections brands.
Snacks volumes were in line with the same quarter last year, the company said, with strong results for the Pringles Minis and Gourmet lines offset by a 4% contraction in the North America chips market and heavy competitive merchandising activity. Net earnings for the division increased by 34% to $150m during the quarter, which was attributed primarily to the low comparison base resulting from the effects of Hurricane Katrina in the previous year.
P& G has raised its organic sales growth outlook for 2007, and now expects organic sales to grow by 5% to 6%, against a previous forecast of 4% to 6%. The company now expects earnings per share for the year to be in the range of $2.99 to $3.03, up 13% to 15% from the previous year.
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