P&G earnings rise on cost cuts, Duracell sale

Procter & Gamble reported a jump in third-quarter earnings Tuesday, but lower revenues revealed the drag from the strong dollar as well as weak demand in oil-dependent countries.

Net income for the quarter ending March 31 was $2.8 billion, up 27.7 percent from the same period a year ago.

Revenues were down 6.9 percent at $15.8 billion.

Earnings translated into 86 cents per share, four cents above analyst expectations.

P&G shares fell 0.9 percent to $80.67 in early trade.

Sales fell in all five of P&G's consumer product categories. However, volumes for home care products were up two percent when foreign exchange effects were excluded.

The results reflect a "challenging and volatile macro environment," said chief financial officer Jon Moeller.

The consumer products giant trimmed its 2016 forecast for growth of the global consumer products market from 3-4 percent to 3 percent due to the downturn in markets hit hard by the crash in crude oil prices.

"With the lower oil prices, many economies that are based on the petroleum complex are struggling," Moeller said. "That does affect consumption levels and the sales rates in those markets."

Moeller said the US and Japanese markets were improving, while China was still growing, but not as quickly as previously. Europe was flat.

Brands with good results included the shampoos Pantene and Head & Shoulders, and products to treat adult incontinence.

Lower-performing product areas included health care, due to a fall in the number of people suffering from coughs and colds during the mild US winter.

P&G said results in the quarter benefited from the sale of its Duracell battery business to Berkshire Hathaway, which closed on February 29.

Net income was also boosted by a 9.2 percent drop in expenses to $4.5 billion.

P&G in February announced plans to cut $10 billion in spending over the next five years. Moeller said some of the spending cuts would come from automating and digitizing more of its manufacturing and distribution operations.