CORRECTED-UPDATE 2-P&G warns of drop in full-year net sales as dollar strengthens

martes 27 de enero de 2015 13:46 GYT
 

(Corrects net sales estimate to $20.62 billion from $2.62 billion in para 10. The error also appeared in an earlier version of the story)

By Shailaja Sharma and Nandita Bose

Jan 27 (Reuters) - Procter & Gamble Co, the world's largest household products maker, said on Tuesday that impact from a strong dollar would hurt earnings this fiscal year, with full year net sales likely to fall 3 to 4 percent, sending its shares down nearly 4 percent.

P&G, which derives roughly two-thirds of revenue outside the United States, said the devaluation of almost every currency in the world versus the U.S. dollar hurt earnings, with the Russian ruble leading the way.

"This is the most significant fiscal year currency impact we have ever incurred," Jon Moeller, chief financial officer said in an earnings conference call.

The dollar gained nearly 13 percent against a basket of major currencies in 2014, its strongest performance since 1997. For U.S.-based companies, the stronger dollar hurts the value of sales in overseas markets.

Procter & Gamble said the exchange rates would reduce full-year sales by 5 percent and profit by 12 percent, or at least $1.4 billion after tax. Out of that, $1 billion would be as a result of currency devaluation in six countries - Russia, Ukraine, Venezuela, Japan, Argentina and Switzerland.

Moeller said the impact from currency fluctuation will never go away fully and the company is working to further localise its supply chain and is building 20 new manufacturing plants in emerging markets.

Procter & Gamble said it held market share in Latin America, Europe, India, Middle East but lost share in China and Japan. The Chinese market has become very promotional in nature, he said.   Continuación...