P&G Profits Climb Despite Rising Costs

02 May 2008

CINCINNATI: The world's number one advertiser, Procter & Gamble, says it can withstand rises in the cost of oil and raw materials through price increases, cost controls and strong growth in emerging markets.

The consumer goods titan, whose brands include Pampers diapers and Gillette razors, reported a profit of $2.71 billion (€1.74bn; £1.36bn) for the first calendar quarter, compared with $2.51bn a year ago. Revenue rose 9% to $20.46bn year on year.

Chairman/ceo AG Lafley said the company was optimistic for its brands, despite the slump in the US economy.

He declared: "Virtually everything we sell is not discretionary. You know, it's a staple. You have to go to the bathroom. You have to get up in the morning and brush your teeth. You've got to shower. You've got to shave ... you've got to wash your clothes."

In contrast, rival Colgate-Palmolive reported raw material costs and restructuring charges contributed to a 4.1% slide in earnings to $466.5 million. Sales, however, rose 16% to $3.7bn.

Kraft Foods' Q1 earnings slipped 13.8% to $608m, mostly due to exceptional items linked to the spin-off from Altria. Revenues climbed 20%, helped by the acquisition of Danone's biscuit business in Europe and by currency gains

US cereals and snacks giant Kellogg reported a 2% drop in earnings to $315m on a 10% rise in sales to $3.3bn.

Data sourced from Financial Times online; additional content by WARC staff