P&G reports 40% boost in quarterly profit

January 29, 1991|By John H. Gormley Jr.

The Procter & Gamble Co. reported yesterday that its earnings for the quarter that ended Dec. 31 increased 40 percent over those for the same period a year ago.

P&G, the world's biggest producer of soaps and detergents, is the parent of Noxell Corp., the Hunt Valley-based maker of cosmetics that P&G purchased at the end of 1989.

P&G reported that net income for its second quarter was $490 million, up from $350 million in the second quarter of 1989. Per-share earnings were $1.28, up from 93 cents in the second quarter of 1989.

The big jump resulted primarily from an increase in sales, which were up 13.8 percent, to $6.8 billion, for the quarter, the Cincinnati-based company, said.

Those sales figures are a more accurate reflection than net income of actual increases in the company's level of business.

About 24 cents of the 35-cent increase in per-share earnings in the recent quarter was the result of one-time events in 1989.

Those events, a $91 million gain from the sale of the Crush soft drink business and $174 million to cover the consolidation of manufacturing facilities, had the effect of reducing net income by $83 million in the second quarter of 1989.

Without those two unusual events, the company would have shown a more moderate but still striking 13 percent increase in net income for the quarter that just ended, the company said.

Douglas M. Lane, an analyst for Provident National Bank in Philadelphia, said P&G's unit sales have grown considerably, particularly overseas.

"Their basic business is expanding," he said. "Overseas is a big focus with them."

Mr. Lane said the company's foreign markets are not as mature as those in the United States, giving P&G good prospects for continued growth.

He cautioned, however, that many foreign economies, including those of Japan and Germany, are beginning to show signs of slowing.

The increase in earnings apparently did not satisfy Wall Street investors.

The company's stock price declined $2.50 a share, to $77.50.

Three months ended 12/31/90

Revenue.. .. Net.. .. .. .. Share..

'90..6,857,000,000..490,000,000..1.28

'89..6,025,000,000..350,000,000.. 0.93

% change.. +13.8.. .. +40.. .. .. +37.6

Six months ended 12/31/90

Revenue .. .. Net.. .. .. .. Share

'90..13,509,000,000..1,045,000,000.. 2.77

'89..11,742,000,000..914,000,000.. .. 2.44

% change.. +15.0.. .. +14.3.. .. .... +13.5

bTC

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