Procter & Gamble
The maker of Gillette razors and Tide laundry detergent, which has seen some of its brands lose market share as recession-hit consumers trade down to cheaper or private-label brands, said on Thursday that it plans to accelerate its spending on new plants and new products.
P&G said it is expanding its presence in faster-growing emerging markets like India, where it launched its Pampers brand of diapers. Within the next five years, the company said it expects to sell its products in 8 million stores in emerging markets, up from about 4 million now.
It is also launching new products at home and abroad under its core brands, such as a new Tide Stain Release laundry additive, the company said at an investor conference.
Due to these initiatives, P&G said it expects earnings of $3.65 to $3.80 per share for fiscal 2010, which starts in July, and net sales ranging from down 2 percent to up 1 percent.
Analysts on average expected fiscal 2010 earnings of $3.92 per share, according to Reuters Estimates.
BMO Capital Markets analyst Connie Maneaty recommended buying P&G shares on any weakness resulting from the outlook as she sees the company's fundamentals improving over the next year.
We expected P&G to offer an outlook that pointed to heavy investment to recoup share losses, especially in detergents, and accelerate the investment in faster-growth international markets, Maneaty wrote in a note to clients. We believe today's news represents a solid buy-point.
When asked about whether it planned to lower any prices this year, P&G executives said there would be surgical adjustments, primarily in its laundry and paper goods businesses.
For 2009, P&G expects net sales growth in the range of minus 2 percent to minus 4 percent and net earnings in the range of $4.20 to $4.25 a share. Analysts on average were expecting $4.23 per share, according to Reuters Estimates.
P&G shares were down 8 cents at $51.70 on the New York Stock Exchange.
(Reporting by Martinne Geller and Ben Klayman, editing by Dave Zimmerman and Tim Dobbyn)