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Earnings Roundup

P&G earnings beat analyst forecasts

Associated Press / October 30, 2009

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Procter & Gamble Co. sees budget-conscious consumers around the globe responding to price cuts and new products that promise to give them more for their money.

The maker of consumer products, which owns Boston’s Gillette Co., reported better-than-expected first-quarter results yesterday and forecast a better outlook after a year of households cutting spending and trading down to cheaper brands.

P&G, based in Cincinnati, reported profit was off 1 percent at $3.31 billion, or 1.06 per share, compared with $3.35 billion a year ago. Sales fell 6 percent to 19.8 billion. Analysts expected earnings of 99 cents on $19.83 billion.

This was the first quarter under Bob McDonald, the new chief executive who has pledged to aggressively win back market share from lower-priced competitors. The company cut prices, stepped up advertising focused on offering value, and added cheaper versions of such items as Pampers diapers. .

McDonald said P&G was pleased to see sales improving, “but we also realize there’s more work to do.’’ P&G officials said their optimism is tempered by continued high unemployment.

P&G said organic sales - a key gauge that excludes acquisitions and other such effects on sales totals - were up 2 percent, after the company had earlier forecast them to be flat to down 3 percent. P&G now expects organic sales to grow 2 to 5 percent in the current quarter, up from an earlier forecast of 1 to 4 percent, with net sales growing 3 to 7 percent.

P&G also said earnings per share for the October-December quarter should be $1.36 to $1.44, boosted by an expected 43-cent gain from its recently announced $3.1 billion sale of its prescription drug business. For the year, P&G raised the low end of earlier guidance by 3 cents to a range of $4.02-$4.12. Analysts expect $1.40 for the second quarter and $4.10 for the year.

The company did not provide separate figures for its divisions, including Gillette Co.

Investment losses pummel MetLife

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MetLife Inc. yesterday reported a loss for the third quarter, driven by $1.4 billion in investment losses.

The investment losses were primarily related to complex investments known as derivatives, which are used to hedge a number of risks, including changes in interest rates and foreign currencies. Excluding derivatives, net realized investment losses declined 24 percent from the second quarter.

For the period ended Sept. 30, MetLife reported a loss of $650 million, or 79 cents per share, compared with a profit of $600 million, or 83 cents per share, a year earlier.

Excluding investment gains and losses, operating earnings rose 18 percent over the third quarter of last year to $718 million, or 87 cents per share. That was in line with the average analyst estimate, which typically excludes one-time, unusual items.

Total revenue dipped 1 percent to $12.41 billion, slightly better than expected.

MetLife, which released its report after the market closed, also declared an annual dividend of 74 cents.

Associated Press

Exxon Mobil profit off as oil prices fall

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The world’s largest publicly traded oil company said yesterday that oil production is bouncing back with crude prices.

A worldwide supply glut may yet cool the latest surge in oil, squeezing refiners and keeping profits in oil patch well below their peak last year.

Exxon Mobil Corp. reported profit from July to September dropped 68 percent to $4.73 billion, or 98 cents per share. The results were the best of the year so far, but they’re less than a third of what Exxon earned in the same period of 2008, when crude prices spiked above $147 a barrel.

The Irving, Texas, company gets most of its income from oil and gas production, and in the third quarter it increased production by 3 percent to 3.69 million barrels of oil equivalent per day. Yet the returns are not as good because crude fetched an average of $50 less per barrel when compared with the year-ago period.

Also yesterday, Royal Dutch Shell PLC, Europe’s largest oil company, reported a 62 percent fall in profit for the third quarter.

Shell said profit was $3.25 billion, down from $8.45 billion in the same period a year ago. Sales fell 43 percent to $75.0 billion.

Associated Press

Health costs hurt Aetna’s net income

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Managed care company Aetna Inc. heads into the final quarter of 2009 fighting swine flu and rising unemployment like the other major health insurers.

But the Hartford insurer’s third-quarter profit grew 18 percent, and executives said yesterday they finally have a handle on rising medical costs, which have hurt performance in the past couple of quarters.

Medical costs still climbed faster than expected in the third quarter and that helped chop Aetna’s operating earnings 43 percent.

Chief executive Ronald A. Williams, however, said the quarter’s results don’t reflect “decisive actions’’ Aetna is taking to corral costs, including improvements to contracts with providers.

“The pricing that we put in place for 2009 turned out to not really be what we needed to achieve the results and margins that we had historically been delivering,’’ Williams said.

Overall, Aetna earned $326.2 million, or 73 cents per share. That represents an increase from $277.3 million, or 58 cents per share, in the same quarter last year, when Aetna said it incurred heavy capital losses. Revenue grew 9 percent to $8.7 billion.

Associated Press