Procter & Gamble

(PG) - Get Report

posted stronger-than-expected fourth-quarter earnings and guided in line for fiscal 2007.

The Cincinnati-based consumer products giant made $1.9 billion, or 55 cents a share, for the quarter ended June 30, up from the year-ago $1.39 billion, or 52 cents a share. Sales rose 25% from a year ago to $17.84 billion. Analysts surveyed by Thomson Financial were looking for a 54-cent profit on sales of $17.5 billion.

Sales rose 8% from a year ago organically, excluding the effect of acquisitions. Price increases taken across several segments added 1 percentage point to sales growth. In addition, a more premium product mix, driven by product initiatives and the impact of adding the Gillette business, more than offset the negative mix impact of disproportionate growth in developing regions and contributed 1 percentage point to sales growth.

Gross margin improved by 150 basis points to 50.2% during the quarter. Commodity costs had a negative impact on gross margin of about 100 basis points. Organic volume growth, pricing and cost savings projects more than offset commodity cost increases. The mix benefit from adding the Gillette businesses contributed approximately 125 basis points.

During the June quarter, the company repurchased $4 billion of P&G stock under the previously announced Gillette share repurchase program. The company completed its share repurchases under this program in July. The total value of shares purchased under the program was $20.1 billion. Going forward, the company has now resumed its discretionary share repurchases.

For the quarter ending in September, Procter & Gamble expects to make 76 cents to 78 cents a share, in line with the 78-cent Wall Street target. Sales growth should be 23% to 27%, against the 23% expectation.

For the year ending next June, P&G expects to make $2.96 a share to $3 a share, in line with the $2.99 Thomson Financial target. Sales are expected to rise 4% to 6% organically, in line with the company's long-term guidance.