Procter & Gamble Co (P&G), whose chief executive officer is under pressure from activist investor Bill Ackman, raised its profit forecast for this year after gaining market share in key secotr such as US detergents.
P&G’s share price rose to its highest in more than five years after the firm boosted and narrowed its annual profit forecast, excluding some items, to between US$3.97 and US$4.07 a share from between US$3.80 and US$4. Analysts have predicted US$3.98 on average.
P&G gained market share with new products, such as Tide Pods, as CEO Bob McDonald works to boost profit by cutting expenses and jobs, and consolidating local suppliers.
McDonald disappointed investors last year when he lowered profit forecasts three times. Ackman, whose stake in P&G is valued at about US$2 billion, has pushed to replace him.
“There are signs that the company is improving — slowly — but that momentum needs to continue going forward for discontent to evaporate,” Sanford C. Bernstein & Co Ali Dibadj said in an e-mail.
Dibadj, based in New York, rated the shares “outperform.”
Shares P&G, the world’s largest consumer products maker, rose 4 percent to US$73.25 at the close of trading in New York on Friday, the highest price since December 2007. The shares gained 1.8 percent last year, compared with a 13 percent gain for the S&P 500 Index.
Net income in the second quarter ended on Dec. 31 last year more than doubled to US$4.06 billion, or US$1.39 in earnings per share, from US$1.69 billion, or US$0.57 in earnings per share, a year earlier, P&G said on Friday in a statement.
Excluding some items, profit of US$1.22 a share topped the US$1.11 average of estimates compiled by Bloomberg.
The results included restructuring costs and a gain on the purchase of the balance of P&G’s Baby Care and Feminine Care joint venture in Iberia.
Net sales rose 2 percent to US$22.2 billion, topping the US$21.9 billion average of analysts’ estimates.
In the US, P&G saw market share gains in laundry and dish detergent; blades and razors; and oral care, McDonald said. P&G gained or held market share in categories accounting for almost 50 percent of global sales, the company said.
The 50 percent gain, or hold, in market share is up from 45 percent in the first quarter and 30 percent in the fourth quarter, chief financial officer Jon Moeller said during a conference call on Friday.