P&G rebound progressing, but investors want more

NEW YORK— Procter & Gamble Co. delivered a message to activist investor and freshly minted board member Nelson Peltz: Things aren’t that bad.

The company reported secondquarter profit that topped analysts’ estimates, providing evidence that its turnaround is progressing. But Peltz and like-minded investors may need more convincing. They sent the stock lower in the wake of the results, a sign that the drumbeat for more radical changes will continue.

Sales at the world’s largest consumer-products company were essentially in line with Wall Street estimates, and product categories such as razors and baby care remain in a slump. Growth also has largely been volume-driven, whereas investors would like to see more signs that the company is able to command price increases, said Bloomberg analyst Deborah Aitken.

P&G is “still very much is transition phase,” she said.

The good news was profit growth. P&G posted an earnings gain of 10 per cent to $1.19 (U.S.) a share, excluding some items. That was well ahead of the $1.14 projected by Wall Street. But organic revenue — stripping out currency effects and other factors — grew more modestly, at 2 per cent.

The company reported revenue of $17.4 billion in the period, which ended Dec. 31. That compared with a $17.39-billion average prediction.