P&G Q2 tops expectations as price cuts drive volume

ATLANTA: Procter & Gamble, the world’s largest consumer-products company, reported second-quarter profit that topped analysts’ estimates after price cuts helped boost volume. Net income in the three months ended December 31 fell to $4.66 billion from $5 billion a year earlier, the Cincinnati-based company said in a statement.

P&G cut prices on 10% of its products to help stimulate demand. Sales in the three months ended December 31 rose 6.4% to $21 billion, after four quarters of declines.

Those results exclude a gain from the sale of P&G’s prescription-drug unit in the second quarter and a year-earlier gain from the sale of its Folgers coffee unit. P&G boosted its organic sales forecast by a percentage point, to growth of 3% to 5% this year. It reaffirmed its forecast for total sales growth of as much as 6% this fiscal year. It also reaffirmed an annual profit forecast of $4.02 a share to $4.12. Analysts estimated $4.17.

Colgate-Palmolive also reported fourth-quarter profit that topped analysts’ estimates by 3 cents. Net income rose to $631 million, from $497 million, a year earlier, as gross margin widened 3.2 percentage points, partly because of price increases. Sales rose 11% to $4.1 billion, the New York-based company said.