By Cliff Peale
The Cincinnati Enquirer

In a welcome announcement for thousands of local shareholders and a signal of confidence in its future profitability, Procter & Gamble Co. announced Tuesday a 2-for-1 stock split and increased its annual stock dividend 9.9 percent.

The Cincinnati-based maker of about 250 consumer brands, including Tide, Bounty and Folgers, also said its overall business continues to be strong enough that it will invest more to market key products.

For the third quarter that ends March 31, P&G said its total sales should increase 20 percent over the same period a year ago and profits are expected to beat Wall Street expectations by 1 or 2 cents per share.

The company's announcement came after the stock market closed. P&G shares gained 2 cents Tuesday to close at $102.49 in New York Stock Exchange trading. The stock price passed the $100 level in January, part of a four-year climb back from a low of less than $60 per share in early 2000.

P&G's last 2-for-1 split came in August 1997. The company has 1.3 billion shares outstanding.

The stock split rewards shareholders with additional shares and makes the stock more attractive to a broader spectrum of buyers because the price per share will be cut in half.

"Obviously, I'm pleased that it's turned around from the lows of 2000," said Ed Givens of Amberley Village, who retired from P&G in 2000 and still owns shares. "Certainly, P&G will be a long-term holding for me."

Chuck Stutenroth, senior portfolio manager at Fort Washington Investment Advisors, which controls more than $5 million in P&G shares, said the improved operating results are most important to him, particularly after the difficulties of 2000, in which P&G failed to meet Wall Street expectations two quarters in a row.

"They've begun to operate at very consistent levels, and sustainability will be the goal," Stutenroth said. "It's recovered a lot of trust."

In the announcement Tuesday, P&G said:

• Shareholders will receive an additional share of stock for each one they own. The new shares will be distributed on or after June 18 to shareholders of record May 21.

• The annual dividend will increase to $2 per share from $1.82 currently. After the stock split, the annual dividend will be $1 per share.

• For the current quarter, P&G said it expects the sales volume of its current products will increase about 10 percent.

P&G will announce its third-quarter earnings April 30.

E-mail cpeale@enquirer.com