Procter & Gamble Cuts 4Q Profit
NEW YORK (AP) -- Procter & Gamble Co. cut its fourth-quarter earnings and revenue forecasts, hurt by unfavorable foreign exchange rates and weakness in developed markets.
Shares of the maker of Tide detergent and Pantene shampoo fell more than 2 percent in premarket trading.
The consumer products company said Wednesday that it expects adjusted earnings between 75 cents and 79 cents per share, down from its previous estimate of 79 cents to 85 cents per share.
Revenue is anticipated to drop 1 percent to 2 percent compared with a prior outlook for a 1 percent to 2 percent increase. The new guidance implies revenue in a range of $20.45 billion to $20.66 billion.
Analysts polled by FactSet foresee earnings of 82 cents per share on revenue of $20.62 billion.
P&G says that it will prioritize investments in its biggest product innovations, its biggest, most profitable markets and in its biggest emerging countries. It also plans to keep investing in newly entered markets.
The Cincinnati-based company has experienced stagnant growth in North America and has concentrated more on emerging markets, which it said in April would account for 37 percent of its annual sales by the end of the fiscal year.
"We are making the necessary adjustments to our growth strategy to increase focus on our core business and to achieve more balanced growth across geographies, product categories and the top and bottom lines," Chairman, President and CEO Bob McDonald said in a statement.
For fiscal 2013, P&G expects adjusted earnings to be up by a mid-to-high single digits percentage rate. The company said it will give an update to the guidance when it reports its fiscal 2012 results on Aug. 3.
Its shares fell $1.46, or 2.4 percent, to $60.75 in premarket trading. Its shares have traded in a 52-week range of $57.56 to $67.95.
P&G provides its forecasts on Wednesday at the Deutsche Bank Global Consumer Conference in Paris.
The company reaffirmed its restructuring plan, which involves cutting 5,700 jobs by the end of fiscal 2013 and saving $10 billion by the end of the fiscal 2016.
Like many other consumer products companies, P&G has also been raising prices to deal with higher costs for materials like pulp, fuel and packaging. But in April, P&G said it was rolling back prices in six categories: powdered laundry detergent in the U.S., laundry products in Mexico and the U.K., and North American oral care, dish care and blades and razors. Aside from those categories, other price increases have remained in place.