Procter & Gamble profit falls short in 4th qtr as marketing costs rise; sales increase

P&G 4Q profit falls short as marketing costs rise

CINCINNATI — Procter & Gamble Co.’s fourth-quarter net income fell 12 percent, 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 percent, 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. The world’s biggest advertiser reported it bumped up ad spending by more than $1 billion in the past year, to $8.6 billion total.

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 percent 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 percent for the quarter and 3 percent for the year. P&G totaled $78.9 billion in sales for its fiscal year, up 3 percent.

Company officials told reporters in a conference call that they’re seeing broad-based sales growth across product lines and regions, and that P&G is also building or holding market share everywhere.

P&G expects more sales growth in the coming year, projecting organic sales up 4 to 6 percent with net sales up 2-4 percent. The company expects earnings in a range of $3.91 to $4.01 per share.

Analysts surveyed by Thomson Reuters expect $3.98 on average.

For the current quarter, P&G expects revenue to grow between 1 and 3 percent. Adjusted for discontinued businesses, acquisitions and foreign exchange effects, it expects sales to grow between 3 and 5 percent, with earnings of 97 cents to $1.01 per share. Analysts expect $1.04.