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Price hikes boost P&G's net income

October 30, 2008|times wire services

Strong growth in emerging markets, higher prices and more variety of its popular items helped Procter & Gamble Co. post a nearly 9% increase in its fiscal first quarter, the consumer-products maker said.

But P&G dropped the low end of its earnings guidance for the full fiscal year, facing slower sales amid volatility in commodity and energy markets and in foreign exchange rates.

The maker of household products such as Tide detergent, Pampers diapers and Olay skin care said net income increased to more than $3.3 billion, or $1.03 a share, from $3.1 billion, or 92 cents, a year earlier.

Quarterly sales rose 9% to $22 billion, led by double-digit growth in emerging markets.

Analysts surveyed by Thomson Reuters on average had expected 98 cents on revenue of $21.8 billion. But P&G shares fell $1.90, or 3%, to $61.33.

For the current quarter, P&G projects per-share earnings of $1.45 to $1.50, including the 50-cent gain from the sale of its Folgers Coffee business and 3 cents in restructuring charges. J.M. Smucker Co. is taking over the coffee business in a $2.95-billion stock deal.

Analysts expect earnings of $1.47 a share.

P&G now projects full-year earnings per share, including an estimated 50-cent gain from its divestiture of Folgers minus restructuring charges of 12 cents a share, of $4.15 to $4.25. The earlier range started at $4.18.

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