NEW YORK - Procter & Gamble Co. said Friday that its net income climbed 45 percent in its fiscal fourth quarter, boosted by the sale of its snacks division. Even without the impact of the sale, its earnings beat Wall Street expectations and the company said it was making progress with its cost cutting plan and strategy to improve results by focusing on its most profitable categories.
The maker of Tide detergent, Crest toothpaste and other consumer goods also said Friday that it plans to buy back $4 billion in shares this fiscal year. That's a reversal from June, when the company said it did not plan any share repurchases.
P&G has admitted missteps in pricing and balancing growth in emerging markets, which make up about 30 percent of its sales, with the realities of an uncertain global economy and lackluster market share growth.
In this July 16 photo, Dawn, a Procter & Gamble product, is displayed at Target in Durham, N.C. Procter & Gamble says, Friday, its net income climbed 45 percent in fiscal fourth quarter, boosted by the sale of its snacks division. But revenue slipped, hurt by the stronger dollar and high commodity costs.
On Friday, P&G executives also sought to reassure analysts and investors that its $10 billion cost-cutting plan and its strategy to prioritize investments in bringing new products to market and growing in its biggest and most profitable markets and its biggest emerging countries, are all on track.
The pressure is on, since activist investor William Ackman disclosed last month he has a 1 percent stake in the company. Ackman has agitated for change at companies including Target Corp. and J.C. Penney. In a call with the media, P&G executives said they are having a dialogue with Ackman's Pershing Square like the company does with all of its investors, but those discussions are confidential.
In the call, CEO Bob McDonald said the company's strategy will work, but it will take some time. He cited P&G's long history as a reason why he believes it will be successful.
"Over long periods of time, when Procter & Gamble successfully executed its business model, it is consistently delivered and it is outperformed," he said.
He said periods of underperformance, like past two years, have historically been followed by periods of outperformance.
"This past track record does not in any way guarantee future success," he said. "It does reflect, though, the strength of a time-tested business model."
CFO John Moeller added that the company is ahead on its job cutting plans, having cut 2,000 non-manufacturing jobs by June 30, when the target was 1,600 jobs. The company said its target of cutting 10 percent of jobs should be reached by the end of the calendar year.
During the quarter, P&G's global market share was down half a percentage point, and overall market share was flat or higher in one-third of P&G's categories. That has improved to 45 percent in the current quarter, helped by raising prices in some areas and lowering them in others.