P&G Profit Edges Up on Lower Costs

Procter & Gamble Co. said its third-quarter profit rose 1.7% as expenses fell, though sales also dropped slightly.

Core earnings topped analysts' expectations, but the company cuts its earnings outlook for the year.

The company--which produces Pampers diapers and Tide detergent, among several other big-name consumer products brands--has again started to focus more on higher-priced premium offerings and core household and personal-care products under the leadership of A.G. Lafley, who's in his second go-round as chief executive.

As part of this strategy, P&G plans a new Gillette razor, called ProGlide FlexBall, that features ball-hinge that allows the blade to pivot, The Wall Street Journal reported last week. Earlier this month, the company agreed to sell a large part of its pet foods business to Mars Inc. for $2.9 billion, a deal expected to close in the second half of this year.

"We're operating in a slow-growth, highly competitive environment, which places even greater importance on strong innovation and productivity improvement," Chief Executive A.G. Lafley said.

For the latest quarter, P&G reported a profit of $2.61 billion, or 90 cents a share, up from $2.57 billion, or 88 cents a share, a year earlier. Excluding special items such as restructuring expenses, core earnings rose to $1.04 a share from 99 cents.

Sales fell slightly to $20.56 billion. Organic sales, which exclude impacts from currency movements and acquisitions and divestitures, rose 3%.

Analysts surveyed by Thomson Reuters had expected $1.01 a share in earnings and $20.68 billion in revenue.

Selling, general and administrative expenses fell 5.1% to $6.5 billion.

The company said it expects core earnings growth for the year of 3% to 5%, down from its previous call for 5% to 7%.

Write to Michael Calia at [e-mail]

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