Fearing slower growth, Procter and Gamble cuts revenue forecast
Procter Gamble, the world's largest consumer products maker, cut its fourth-quarter revenue and income forecast Wednesday as it fears the slow growth in developed markets and China to continue.
Manufacturer of major global brands including Tide detergent, Pampers diapers and Duracell batteries, this is the second profits warning in as many months by PG, telling investors that organic sales would grow by 2-3 per cent over the coming quarter instead of 4-5 per cent. Total sales are set to fall by 1-2 per cent instead of achieving growth of 1-2 per cent.
For the full year, the company expects an organic growth of 2-4 per cent.
Consumer spending accounts for about 70 percent of all economic activity in the U.S. With few companies hiring, the weak forecast from PG was a worrisome sign that one of the country's most important economic engines may be weakening. PG makes
Vowing to step up focus on its 40 core markets including the UK over the next year, Chief Executive Bob McDonald said, "We are making the necessary adjustments to our growth strategy to increase focus on our core business and to achieve more balanced growth across geographies, product categories and the top and bottom lines."
"The entire PG organisation and specifically its leadership is committed to winning. With more focus and better balance, we are confident we can deliver the level and quality of results that will enable PG to win with our consumers, our customers and our shareholders," he added.
Earlier this year, PG signaled 5,700 job cuts to generate $10 billion in cost savings.
The company also added to the shareholder discontent by its recent announcement of cut in "core earnings per share" forecast from a range of $0.79 to $0.85 to a range of $0.75 to $0.79.
The Wall Street has also witnessed a dip in PG market share, reduced profit forecast, rise in product prices and a $1.5 billion write-down on old acquisitions.
Source: Britain News.net
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