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P&G Guides Profits Higher

Earnings for the first quarter top estimates.

Procter & Gamble

(PG) - Get Procter & Gamble Company Report

raised its fiscal 2007 forecast after saying net sales for the first quarter rose 27% from a year ago, owing to strong results from its base business and the addition of Gillette.

Revenue for the quarter ended Sept. 30 jumped to $18.79 billion from $14.79 billion a year ago. P&G earned $2.7 billion, or 79 cents a share, compared with just above $2 billion, or 77 cents a share, in the year-ago period.

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Profits for the latest quarter included an estimated cut of 5 cents to 6 cents from dilution related to the Gillette acquisition. On average, analysts were calling for earnings of 78 cents and sales of $18.56 billion.

For the full fiscal year, P&G expects organic sales to grow by 4% to 6%, in line with its long-term target range. Total sales should increase 9% to 11%.

The company boosted its earnings outlook, citing a better forecast for commodity and energy costs, to a range of $2.97 to $3.02 a share, up 13% to 14% from the previous year. For the fiscal second quarter, P&G is projecting total sales growth of 5% to 8% and profits of 81 cents to 83 cents.

"The company delivered broad-based growth behind strong innovation on both the base business and Gillette," said Chairman, President and Chief Executive A.G. Lafley. "We are delivering our growth commitments and continue to make good progress with the Gillette integration. Looking forward, we expect earnings per share growth to accelerate driven by strong base business results, the ramp-up of Gillette synergies and an improving cost environment."