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P&G Posts 17% Growth; Raises Fiscal Year Outlook

Posted: January 30, 2007
The Procter & Gamble Company announced net sales growth of 8% to $19.73 billion in the October/December quarter. Sales growth, according to the companym was driven by its blades and razors and fabric care/home care divisions, both up 11% during the quarter. Organic volume and sales grew 5%, with all reportable segments and geographic regions delivering organic volume growth during the quarter. Earnings per share increased 17% to $0.84 per share behind sales growth, operating margin improvement and Gillette acquisition benefits.

"This was another solid quarter of broad-based sales and earnings growth during a period of heavy Gillette integration activity," said A.G. Lafley, chairman of the board, president and chief executive, P&G. "The results this quarter and a positive outlook for sales and margin improvement give us confidence to raise our top and bottom line guidance for the fiscal year."

Every reportable segment grew sales led by double-digit increases in blades and razors and fabric care/home care. P&G states that sales increased behind solid market share growth and continued success on product initiatives—including Gillette Fusion, Tide Simple Pleasures, Febreze Noticeables, Olay Definity, Pantene Color Expressions, Head & Shoulders restage and Crest Pro Health. Volume increased 4% and organic volume, which excludes the impacts of acquisitions and divestitures, increased 5% during the quarter. Pricing added 1% to sales growth and favorable foreign exchange added an additional 3%. Organic sales, which exclude the impacts of acquisitions, divestitures and foreign exchange, increased 5%. Net earnings during the quarter increased 12% to $2.86 billion.

Beauty net sales increased 8% during the quarter to $5.88 billion driven by solid volume growth across most categories. Organic sales increased 5%, despite a negative impact from sales disruptions to the SK-II franchise in Asia. Volume was up 4% and organic volume increased 5% behind mid-single digit organic volume growth in hair care, skin care and feminine care and high-single digit organic growth in prestige fragrances.

Gillette blades and razors market consumption increased 7% behind strong results on Fusion in developed regions and on Mach 3 in developing regions. Volume increased 4%during the quarter while favorable product mix and pricing each added 2% to sales growth.