P&G posts solid quarter, gives CEO more breathing room
By Jessica Wohl
(Reuters) - What a difference a year makes for Procter & Gamble Co (PG.N: Quote) and CEO Bob McDonald.
Last February, he unveiled a $10 billion restructuring including thousands of job cuts after the world's largest household products company admitted it was not nimble enough, especially in emerging markets.
In April, Wall Street analysts roasted McDonald on a conference call after P&G's latest profit warning and having to rescind some price increases. The dour performance prompted activist investor Bill Ackman to call for change last summer when he bought the shares.
Since then, McDonald has refocused the world's largest household products maker on winning back market share for products ranging from Gillette razors to Tide detergent.
On Friday, Procter & Gamble delivered its strongest indication yet that its turnaround efforts are paying off, posting a better-than-expected profit and improved forecasts, helped by U.S. hits such as Tide Pods and new hair care products under the Vidal Sassoon brand.
The results and rosy outlook - it was the first time the company raised its annual profit forecast since April 2010 - led to a 4 percent rise in P&G's stock price, setting a high for McDonald's 3-1/2 year tenure.
Even Ackman, who for months has blamed McDonald's team for earlier missteps, said on CNBC that the results were an indication of "very significant progress."
Friday's report showed better-than-expected profit, helped in part by a gain from an acquisition, and sales that surpassed expectations, with growth in all divisions. Even so, some analysts think the company still has more to accomplish. Continued...