P&G cuts revenue forecasts, to focus on big businesses

by Jack Bibey | Wednesday, Jun 20, 2012 | 441 views

Procter & Gamble Co, or P&G, has taken the blame for the lack of new big products and at not being quick enough at cutting down the costs, while it deals with a progressive slower demand from Western Europe, China and the USA.

This is second time in the last two months that P&G , the largest household product maker in the world, is cutting down its forecast and has said that it will not be looking at the repurchase of shares in the forthcoming fiscal as it tries to maintain the credit rating of “AA-“ .

A day after ,shipping firm FedEx Corp warned of economic growth slowing down globally and Danone SA, the food maker, saying that the profits would take a big hit with the Spanish customers switching to cheaper brand of yogurt.

As it looks to shore up the profits, the U.S maker of products like the Tide laundry detergents and Gillette razors said that it would be focusing in its ten most significant developing markets, 20 biggest new products and its top 40 businesses.

The shares of P&G were down by 3.2 % at $60.2 in the afternoon trading session on the New York Stock Exchange. Stocks of the rivals having a global exposure in the likes of Unilever and Colgate-Palmolive were also down in today’s trading.

Analysts are of the opinion that the firm is taking the right kind of measures for spurring the profits up , which have been stagnated in the three year term of CEO Bob McDonald. But there are also concerns that these steps might take quite some time before they start bearing fruits for the firm.

Their margin of error has become very narrow and CEO McDonald’s job could be at stake if there is any kind of disappointment in earnings in the upcoming year.

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