Procter & Gamblee Sets Sights On Overseas Markets

Procter & Gamble Co. Chairman and Chief Executive John Pepper mapped out the company’s plans to double sales to $70 billion in 10 years by using its well-known consumer brands to expand into China, Eastern Europe and Latin America.

The maker of Tide laundry detergent and Pampers diapers sees most of the $35 billion in new sales coming from its top-selling products, which include Pantene shampoo and Always sanitary pads, Pepper told analysts and investors at a conference in New York.

In the past three quarters, the company reported disappointing unit sales growth as it changed its supply and pricing systems and faced stiffer competition in Japan. Today’s plan aims to reassure investors that the company will jump-start its sales growth, instead of relying on lower costs to boost earnings, as it has in the past year.

“Spectacular,” said analyst Brenda Lee Landry of Morgan Stanley. “Net earnings growth should be a lot faster than their needs for working capital, ergo, the shareholder’s going to benefit.”

Shares in the Cincinnati-based company have risen about 57 percent in the past year, more than double that of the of the Standard & Poor’s 500 Index, which rose 20 percent. Today, the stock rose 1-3/8 to 137-7/8.

Under the plan, about $15 billion of the sales growth will come from its top-selling product lines, which include disposable diapers, laundry, hair-care and feminine hygiene products. In the past two years, these categories generated more than 60 percent of P&G’s sales growth.

P&G expects to generate about $8 billion more in sales by expanding into the emerging markets of Eastern and Central Europe, China and some areas of Latin America. In the past two years, these countries accounted for about 40 percent of regional sales growth, Pepper said. Of these, China has the largest potential and is expected to generate more than $1 billion in sales this year.

The remaining $12 billion is expected to come from the creation of new brands and product categories. Among these, P&G plans to build its paper tissue and towel business - which includes Bounty paper towels - and its pharmaceuticals business. The company also plans to increase the use of its olestra fat substitute now used only in salty snacks such as Pringles potato chips.

These moves are expected to help boost earnings 11 to 14 percent a year.

Some stocks that moved substantially or traded heavily Firday:

NYSE

J.M. Smucker class A, up 1-1/2 at 19-3/8

The maker of jams and ice cream toppings expects to beat profit forecasts for its fourth quarter ended in April. Smucker, based in Orville, Ohio, said late Thursday its results benefited from ongoing cost reductions and record sales increases in its industrial business.

NASDAQ

Intel, down 11-1/64 at 152-3/4

Cyrix, up 4-1/16 at 26-1/16

Texas Instruments (NYSE), down 2-1/8 at 89-3/4

LSI Logic (NYSE), down 1-7/8 at 42

The computer chip giant warned that its second-quarter results will be disappointing due to weak demand, particularly in Europe. Intel also said its profit margins have slipped from first-quarter levels. The news weighed down several chipmakers and other computer-related issues, but Cyrix rose after introducing a less expensive chip to compete with Intel.

Integrated Living Communities, up 2-1/16 to 11-1/8

An affiliate of Goldman Sachs agreed to acquire the operator of assisted living communities for $11.50 a share. Integrated Living is based in Bonita Springs, Fla.