Procter & Gamble has announced its fourth quarter and full year results, showing sales for the last three months were slightly down, but profits rise on higher retail prices and cost savings.
The company said that sales for its fourth quarter fell by 1.2 per cent to $20.21bn, which was also down on analysts’ expectations. Bloomberg had previously polled analysts whose average expectations for the period were $20.25bn.
However, organic sales for the period increased by three per cent, a figure that underlined the fact that the strong US dollar is continuing to impact revenues earned in overseas markets.
Net income up 45 per cent
Net income for the period advanced a healthly 45 per cent to reach $3.63bn, compared to a figure of $2.51bn in the corresponding period last year, a figure that was above expectations by the same analysts polled by Bloomberg.
P&G is currently undergoing some significant changes, mainly as a result of a major restructuring introduced by CEO Bob McDonald, aimed at saving the company an estimated $10bn by the year 2016.
Likewise, last month activist investor Bill Ackman took a $1.8bn stake in the company through his company Pershing Square, a move that could have repercussions in the board room, on account of Ackman’s reputation for shaking up the status quo in major companies undergoing challenges.
Cost savings should help through difficult 2013
“We enter fiscal 2013 with very strong developing market momentum, strengthened plans on our core developed market business, and with the benefit of a $10 billion cost savings program, which is well underway,” said McDonald.
“Despite a difficult macro environment, we see significant opportunities for top- and bottom-line growth.”
Looking at the full year results, sales increased by 3 per cent to $83.7bn, reflecting high increases in unit volume and price increases across all segments, while organic sales also grew by 3 per cent.
Baby care and family care the only division to show like-for-like sales growth
Of the four primary business divisions, the three cosmetics and personal care businesses showed mixed results for the quarter, with only baby care and family care reporting an increase in like for like sales, up 1 per cent to $4.1bn.
Beauty care sales decreased by 4 per cent to $4.8bn, with negative foreign currency results impacting the figure by 4 per cent, while gains in developing markets where offset by negative growth in developed markets.
In grooming, net sales fell by 6 per cent to $2.0bn, a figure that was again mainly impacted by negative currency translations which reduced the figure by 6 per cent. A steady increase in revenues was again offset by the results in the developed markets, particularly in Europe.
Looking ahead to the fiscal year 2013, the company says that it believes full year sales will be down around 2 per cent, which will include a negative impact of approximately 4 per cent from foreign currencies, while organic sales are expected to rise by 4 per cent.