CINCINNATI - Procter & Gamble Co.'s fourth-quarter net income fell 12 per cent, while sales rose as the maker of Tide and Pampers stepped up marketing and new product development, and P&G projected more sales growth for the year ahead.
The profit slide was larger than Wall Street expected, which hit shares in premarket trading. They fell $2.32, or 3.7 per cent, to $59.74.
The company says it has been spending more on innovation and marketing. It has boosted sales in a tough economy with price cuts, cheaper versions and upgraded premium products of its big-name brands, and more advertising.
Foreign exchange impacts also undercut profits in the quarter, P&G reported Tuesday.
The Cincinnati-based consumer products giant says it earned $2.2 billion, or 71 cents per share, down from nearly $2.5 billion, or 80 cents a share, a year prior. Revenue increased 5 per cent to $18.9 billion.
Analysts expected 73 cents a share on $19.1 billion in revenue.
Organic sales, a key measure that excludes currency fluctuations, acquisitions and other such changes, grew 4 per cent for the quarter and 3 per cent for the year. P&G totalled $78.9 billion in sales for its fiscal year, up 3 per cent.
P&G expects more sales growth in the coming year, projecting organic sales up 4 to 6 per cent with net sales up 2-4 per cent. The company expects earnings in a range of $3.91 to $4.01.
Analysts surveyed by Thomson Reuters expect $3.98 on average.
For the current quarter, P&G expects revenue to grow between 1 and 3 per cent. Adjusted for discontinued businesses, acquisitions and foreign exchange effects, it expects revenue to grow between 3 and 5 per cent, with earnings of 97 cents to $1.01 per share. Analysts expect $1.04.
"The investments we've made in innovation, marketing support and consumer value have delivered accelerating unit volume and profitable market share growth throughout the year, which are clear indications that our strategy is working," Bob McDonald, president, CEO and chairman, said in a statement.
