US consumer goods giant Procter & Gamble said today (27 January) that profits increased in the first half of its fiscal year.
In a trading update, the firm said profit from continuing operations climbed 4% to US$6.41bn in the six months to the end of December. Operating profit, however, dropped 4% to $8.76bn. Sales for the period edged up 2% to $41.48bn.
In the firm’s snacks and pet care division, which includes the Pringles brand, earnings slid 34% to $170m. Sales were down 5% to $1.51bn.
Sales dropped primarily as a result of the “disproportionate growth” of snacks and sales in developing regions, both of which have “lower than segment average selling prices”, P&G said. Unfavorable foreign exchange also affected sales.
In the company’s second quarter, profit from continuing operations fell to $3.33bn, from $4.66bn a year earlier. Sales increased 2% to $21.34bn.
Snack and pet care sales in the quarter dropped 4% to $798m, while profits slid 35% to $93m. Unfavourable foreign exchange reduced net sales by 1%.
Looking ahead, P&G said it expects net sales to increase 3-5% in fiscal 2011. The company maintained its guidance for organic sales growth of 4-6%.
Diluted net earnings per share from continuing operations are expected to be in the range of $3.89 to $3.99, up 10-13%.
“We are expanding market shares by touching and improving the lives of more consumers in more parts of the world, more completely through our innovation and expansion plans,” Bob McDonald, chairman of the board, president and CEO, said. “This is driving strong volume and sales growth ahead of market levels. Core EPS is ahead of year-ago levels, and we are on track to deliver 7-9% growth for the year.”
Shares climbed 3% to $64.11 at 16:41 GMT in trading today.