Procter and Gamble's 3Q profit drops nearly 4 percent

CINCINNATI -- Procter & Gamble Co. says its profit fell nearly 4 percent in the fiscal third quarter as households around the globe cut spending in the recession. The company also trimmed its full-year outlook, expecting slow sales to continue through June.

The world's largest consumer products maker said Thursday it earned $2.61 billion, or 84 cents per share, compared to $2.71 billion, or 82 cents per share, a year ago.

Earnings per share reflected fewer shares outstanding after J.M. Smucker Co. took over P&G's Folgers coffee business in a $2.95 billion stock deal last year.

Revenue dropped 8 percent, to $18.42 billion, also hurt by the stronger U.S. dollar. Analysts expected earnings of 80 cents per share on revenue of $18.9 billion.

P&G has been promoting its well-known brands such as Tide detergent, Pampers diapers and Gillette shavers by emphasizing their value to consumers as well as cutting costs. However, sales were down across its broad portfolio, with sharp declines in such discretionary areas as fine fragrances and personal grooming products.

Organic sales, which exclude impacts of acquisitions and foreign exchange, were up 1 percent for the quarter.

The company cut the high end of its full-year earnings forecast from an earlier range of $4.20 to $4.35 per share to $4.20 to $4.25. Analysts surveyed by Thomson Reuters expect $4.21.

The company now expects net sales to be down 2 to 4 percent for the year, after earlier forecasting that sales would be flat to down 4 percent. P&G expects organic sales to grow 2-3 percent for the year, trimming an earlier range of 2 to 5 percent.

"Our near-term efforts are focused on enhancing consumer value, driving productivity and simplification, and making the necessary investments for the future," Chairman and CEO A.G. Lafley said in a statement.

For the year so far, profits -- boosted by the Folgers sale -- are $10.96 billion, up 21 percent, with earnings per share of $3.46, up 27 percent over $2.72 for the first three quarters of last year. Net sales are down 1 percent at $60.37 billion.