The Cincinnati Enquirer
New rival products and weakened currencies contributed to slow growth in third-quarter sales at Procter & Gamble Co., though worldwide earnings advanced 9 percent.
Net earnings at the Cincinnati-based consumer goods maker rose to $961 million in its fiscal third quarter, which ended March 31, the company said Thursday. That compares with $881 million in the same period a year before.
Share earnings rose 10 percent, to 65 cents a diluted share from 59 cents last year.
Net sales rose 1 percent, to $8.9 billion from $8.8 billion. Excluding the effects of weakened worldwide currencies, sales rose 6 percent, the company reported.
Increased prices contributed to stronger sales in some markets, but product unit volume lagged in North America because competitors didn't follow with price increases. In Asia, economic troubles stalled consumption, leading to a sales decline of 7 percent.
Worldwide unit volume -- the number of individual products sold -- advanced 3 percent.
In a statement, Procter Chief Executive John Pepper highlighted the company's "solid earnings growth" and said P&G will continue to invest in emerging markets and new products.
Tony Vento, an analyst with Edward Jones, said he was disappointed with the quarter's revenue gains and blamed it in part on new-product introductions by rivals Colgate-Palmolive Co. and Frito Lay. Colgate's unit volume, for example, rose 6 percent in its first quarter.
Mr. Vento said fourth-quarter sales at Procter should increase, as competitors begin to raise their prices, but he doesn't think that P&G will meet its compounded annual sales growth target of what he said is 7 percent.
In other earnings reports Thursday:
Ashland Inc. -- The Russell, Ky.-based specialty chemical, automotive products and highway construction company, reported sharply higher earnings for its second quarter, the first since the spinoff of its petroleum refining business into Marathon-Ashland Petroleum LLC.
Net income for the quarter ended March 31 rose to $28 million, or 37 cents a share, from $7 million, or 3 cents a share, a year earlier. The quarter included income of $2 million from inventory valuation adjustments from the creation of the petroleum joint venture Jan. 1 with USX-Marathon. Revenue slipped to $1.8 billion, down from $3.3 billion a year ago, which included $1.6 billion from the petroleum joint venture.
Cincinnati Financial Corp. -- The Fairfield insurer posted net income of $84.2 million, or 51 cents a share, on a post-split basis for the quarter ended March 31, compared with $74 million, or 44 cents a share, a year earlier.
Revenue rose 6 percent to $512.6 million from $483.7 million. Operating income climbed almost 16 percent to $67.5 million, or 41 cents a share, from $58.2 million, or 35 cents a share, in the first quarter of 1997.
The company will split its shares 3-for-1 May 15 to shareholders of record today.
Cinergy Corp. -- The parent of Cincinnati Gas & Electric reported that its first-quarter net income slipped to $106.1 million, or 67 cents a share, from $114.1 million, or 72 cents a share, a year earlier.
Revenue for the quarter ended March 31 rose to $1.33 billion, vs. $1.03 billion a year ago.
Milder weather reduced earnings about 20 cents a share from similar periods with more seasonal weather, the company said. Cinergy was able to offset some of the weather's earnings-reduction effects with continued cost-cutting.
Elder-Beerman Stores Corp. -- The Dayton, Ohio-based retailer's loss increased to $28.95 million for the fiscal year ended Jan. 31, compared with a loss of $12.4 million the year before.
The figures reflect about $55.6 million in costs in the year -- $27.5 million for reorganization and $28.1 million for debt reduction. Share-earnings comparisons aren't available because Beerman became a publicly traded company in February. It emerged from bankruptcy protection Dec. 30.
Earnings before interest, income taxes, depreciation, amortization and reorganization expenses rose 35.1 percent for the year, to $43.9 million from $32.5 million.
Sales rose 2.1 percent to $581.4 million from almost $570 million in 1996. Receipts for stores open at least a year rose 3.7 percent.
