US-based consumer goods giant P&G delivered double-digit volume and core earnings per share growth for the January-March quarter, ended 31 March, exceeding analysts' estimates. However, earnings in the food and beverage segment, one of its core businesses, showed a small drop in both sales and net income.
The company stated that unit volume for its food and beverage segment is showing improvement after a slow start to the fiscal year but is down one per cent overall. Sales were $879 million (€970 million), lower by five per cent, excluding a one per cent negative foreign exchange impact, as Folgers pricing continued to reflect lower green coffee costs. However, despite the drop in sales net earnings grew strongly for the segment, up 18 per cent to $79 million.
For the 3Q, overall unit volume grew ten per cent over the prior year behind double-digit growth in the health care and beauty care businesses and strong progress in fabric and home care. Excluding acquisitions and divestitures, unit volumes increased six per cent. Reported net sales were $9.9 billion, (€10.9 billion) up seven per cent versus the year-ago period excluding a three per cent negative foreign exchange impact, as pricing and mix effects partially offset volume growth.
"Last quarter's results were strong across core businesses, leading brands and top countries. P&G is solidly back on track," said P&G president and CEO A. G. Lafley. "To sustain stronger results long-term, we must continue to focus on consumer value, innovation leadership, outstanding brand marketing and disciplined cash and cost management."
For the 4Q, P&G expects overall volume to be up in the high single digits. Sales, excluding foreign exchange, are expected to be up in the mid-single digits versus year ago. At current rates, foreign exchange would negatively impact sales by two to three per cent. The company projects core earnings per share growth in the low teens reflecting strong volume and higher operating margins.