CINCINNATI — Procter & Gamble announced on Thursday that second-quarter sales rose 2% as the company works to expand market shares in more parts of the world.
Net sales for the quarter rose 2% to $21.3 billion, driven by 6% volume growth, which was offset partially by unfavorable foreign exchange and mix impacts. Organic sales grew 3%.
Net earnings dropped 28% to $3.3 billion, or $1.11 per diluted share, compared with $4.7 billion, or $1.49 per diluted share, in the year-ago period. Net earnings from continuing operations totaled $1.11 per share, up 10%.
Core earnings per share rose 3% to $1.13 per share — 2 cents per share higher than the top end of the company's guidance range. Core EPS is defined as diluted net earnings per share from continuing operations, excluding charges for pending European legal matters and the benefit of a significant adjustment to an income tax reserve, P&G said.
Volume rose 6% behind growth in all major geographic regions, 16-of-17 top countries, 5-of-6 business segments and 19-of-23 billion-dollar brands, P&G stated. Market share was up in all geographic regions and the majority of key countries and brands. Businesses representing about 60% of net sales maintained or grew market share.
"We are expanding market shares by touching and improving the lives of more consumers in more parts of the world, more completely through our innovation and expansion plans," stated chairman, president and CEO Bob McDonald. "This is driving strong volume and sales growth ahead of market levels. Core EPS is ahead of year-ago levels, and we are on track to deliver 7% to 9% growth for the year."
In beauty, net sales rose 1% to $5.3 billion, and organic sales grew 3%. Volume growth, which was driven by double-digit growth in developing regions, grew 5% as organic volume, which excludes the net impact of acquisitions and divestitures, rose 6%. Net earnings rose 2% to $896 million.
Grooming net sales rose 3% to $2.2 billion on a 5% increase in unit volume. Organic sales rose 6%. Volume growth was led by high single-digit growth in developing regions, while developed regions delivered low-single digit growth. Volume in male grooming increased mid-single digits primarily because of blades and razors in developing regions and deodorants in North America. Net earnings rose 11% to $482 million.
In health care, net sales rose 2% to $3.1 billion on unit volume growth of 5%. Organic sales grew 5%. Volume was up high-single digits in developing regions and mid-single digits in developed regions. Volume growth was led by oral care, which was up high-single digits thanks to the success and incremental merchandising support behind Crest 3D White in North America; Oral-B toothpaste expansions in Brazil, Belgium and Holland; and Pro-Health innovation in multiple markets around the world. Net earnings slipped 1% to $531 million due to higher marketing spend and higher commodity costs.
For fiscal year 2011, net sales are expected to increase 3% to 5%, and the company maintained its guidance for organic sales growth of 4% to 6%. Diluted net earnings per share from continuing operations are expected to be between $3.89 and $3.99, up 10% to 13%. Core EPS is expected to be between $3.91 and $4.01, up 7% to 9%.