P&G reports better-than-estimated third quarter earnings

Procter & Gamble reported on Tuesday third quarter earnings that surpassed expectations as the company cut costs and achieved higher margins.

In the three months to the end of March, earnings per share fell to 86 cents from 75 cents per share a year earlier, beating analysts’ estimates of 82 cents.

The maker of Tide detergent and Gillette shaving products said sales declined for the seventh quarter in a row as foreign exchange headwinds and higher prices weighed on volumes. Net sales fell 7% to $15.8bn while organic sales grew 1%.

Total volumes slid 2%, reflecting in part its deconsolidation from Venezuela.

Volumes declined in all businesses, apart from the baby, feminine and family care division.

The company expects organic sales to rise in the low-single digit percentage range in the full year to end of June.

P&G said annual sales would include a negative six to seven percentage point impact from foreign exchange and a two to three percentage point drag from the combined impacts of the Venezuela deconsolidation and minor brand divestitures.

It predicts full-year core earnings to drop 3-6%, compared with the fall of 3-8% it had guided towards in January.

“We continue to make progress on the transformations we are undertaking to return P&G to balanced top and bottom-line growth and maintain strong cash generation,” said president and chief executive David Taylor.

“We delivered another strong quarter of productivity improvement and cost savings, and we increased investments in innovation, advertising and selling to enhance our long-term prospects for faster, sustainable top-line growth and value creation.”