P&G second-quarter profit beats estimates on cost-cutting measures

Procter & Gamble Co reported better-than-expected second quarter profit, helped by cost cutting measures, but said a stronger dollar would take a bigger chunk out of full-year sales.

Shares of the company rose 1.5 percent to $78 in premarket trading on Tuesday.
P&G has been shrinking its portfolio to focus on core, high-growth brands such as Gillette shaving products, Pampers diapers and Tide detergent.

Cost of selling goods fell 11.5 percent to $8.46 billion, while selling, general and administrative costs fell 14.1 percent to $4.60 billion in the quarter.

P&G said it now expected foreign exchange to have a 7 percentage point impact on 2016 sales. It had earlier anticipated an impact of 5-6 percentage points.

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Net earnings attributable to the company rose to $3.21 billion, or $1.12 per share, in the second quarter ended Dec. 31, from $2.37 billion, or 82 cents per share, a year earlier.

Excluding items, the company earned $1.04 per share, beating the average analyst estimate of 98 cents, according to Thomson Reuters I/B/E/S.

Sales fell 8.5 percent to $16.92 billion, slightly below the average analyst estimate of $16.94 billion.

Organic sales that strips out the impact of currency, divestitures and acquisitions, grew 2 percent in the quarter, helped by higher prices.

P&G said it would spend $15 billion-$16 billion in dividend payments, share exchanges and share repurchases this fiscal year, including dividends of more than $7 billion.