P&C profits down despite sales volume growth

Household products maker Procter & Gamble followed rival Colgate Palmolive in posting lower profit for its second-quarter trading as rising commodity costs and low revenue growth hurt performance.

The Gillette brand owner earned $3.33bn (£2.1bn), in the three months from October to December – a 28 per cent decline from $4.66bn, or $1.49 per share, in the same period in 2009.

Per share, it delivered $1.11 earnings, a 26 per cent decline from the $1.49 a year earlier.

P&G saw sales climb two per cent to $21.3bn and the volume of goods sold rose six per cent – but it saw more volume growth in its new lower-priced products, which has weighed on its profits.

"We are expanding market shares by touching and improving the lives of more consumers in more parts of the world, more completely through our innovation and expansion plans," said chief executive Bob McDonald.

Much of the decline stemmed from it delivering an unusually high second quarter result in 2009 after the sale of its pharmaceuticals business.

Excluding unusual items, earnings from continuing operations were $1.13 a share, above analysts’ forecasts of $1.1.

P&G stood by its fiscal 2011 forecasts, calling for earnings from continuing operations of $3.91 to $4.01 per share and organic sales growth of four to six per cent. Analysts expect slightly less.