Procter & Gamble Co. posted a higher-than-expected quarterly profit as new products and strength in emerging markets helped spur sales volume growth at the world's largest household products company.
Cost cuts also helped boost profits in a sluggish global economy that is pushing consumers to buy lower-priced products in some categories.
P&G said profit fell to $3.08 billion, or $1.02 per share, in the first quarter that ended Sept. 30, from $3.31 billion, or $1.06 per share, a year earlier.
Analysts on average forecast earnings of $1.00 a share.
"The pricing is not becoming more benign in the industry," said Sanford Bernstein analyst Ali Dibadj. "Competition is still high."
P&G, which makes such popular items as Pampers diapers and Gillette razors, also said it expected full-year earnings per share of $3.91 to $4.01, excluding special items. Analysts on average had forecast $3.97 per share, according to Thomson Reuters I/B/E/S.
The company warned that higher marketing spending and commodity costs would affect second-quarter profit.
As the economy shows halting signs of recovery, consumer products companies are using promotions and focusing on new products with fresh features to attract purchases.
P&G has invested in new products this year, including Pampers Dry Max diapers, the Fusion ProGlide razor and Crest 3D White tooth-whitening strips.
"During the quarter we still were very successful on premium-priced items like Gillette ProGlide, which is a 15 percent price premium, and other premium-priced items," Chief Executive Officer Bob McDonald said. "But then there was also some trading down as you would expect within categories."
For example, the launch of Gain dishwashing liquid has been successful as a mid-priced brand, McDonald said.
P&G's developed markets grew below the company's expectations at around 1 percent, while developing markets grew eight times as fast, McDonald said.
Kimberly-Clark Corp., which competes with P&G in such categories as diapers, tissues and tampons, posted lower-than-expected earnings on Tuesday due to sluggish sales and lower prices.
Dibadj noted that P&G's first-quarter results came in much as expected, with good cost control and pockets of strength in its fabric care, home- and baby-care businesses, which were helped by lower prices and promotions.
Revenue rose 2 percent to $20.12 billion, compared with the analysts' average estimate of $20.24 billion.
But volume, a measure of products shipped that factors out currency fluctuations and price changes, rose 8 percent.
P&G's shares rose 74 cents to $63.60 in light premarket trading.
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