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P&G Reforecasts Amidst Slower Growth

Posted: June 25, 2012

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For the April–June quarter, organic sales growth is now expected to be in the range of 2–3%, compared to a prior range of 4–5%. Foreign exchange is now expected to reduce net sales by 4%. Net sales are expected to be in the range of -2% to -1% compared to a prior range of an increase of 1–2%. Core earnings per share are now expected to be in the range of $0.75–0.79 per share, compared to a prior range of $0.79–0.85. All-in diluted net earnings per share, which includes a gain of $0.47–0.50 on the sale of the snacks business, are expected to be in the range of $1.17–1.26 per share, compared to a prior range of $1.21–1.32. Versus prior guidance, the revisions to the company’s fourth quarter outlook are primarily driven by slower than anticipated top-line growth from slower than expected market growth rates and market share softness in developed regions and negative impacts from foreign exchange rate changes.

Organic sales are expected to increase in the range of 2–4%. Core earnings per share are expected to be in-line to up mid-single digits percentage versus fiscal 2012 results. P&G noted that foreign exchange, based on early-June spot rates, will negatively impact fiscal 2013 EPS growth by approximately four percentage points. Excluding foreign exchange impacts, P&G’s core earnings per share outlook equates to approximately mid-to-high single digit growth.

The company noted that it has just recently completed its planning process for fiscal year 2013 and cautioned that the high degree of volatility in areas such as foreign exchange, commodity costs and government policies could cause these preliminary estimates to change materially throughout the coming fiscal year. P&G said it will provide an update to its fiscal year 2013 financial outlook when it releases final results for fiscal year 2012 on August 3, 2012.

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