WRAPUP 3-P&G, Colgate results beat, consumers spend more

* P&G Q2 EPS $1.49 vs Wall St view $1.42

* P&G raises sales forecast, keeps EPS view unchanged

* Colgate Q4 EPS $1.21 vs Wall St view $1.18

* Colgate still sees double-digit EPS growth in 2010

* P&G shares up 2.17 percent, Colgate rises 0.55 percent
(Adds quotes from investor, Colgate, Estee Lauder and Henkel)

By Jessica Wohl

CHICAGO, Jan 28 (BestGrowthStock) – Procter & Gamble Co (PG.N: ) and
Colgate-Palmolive Co (CL.N: ) boosted sales of their brand name
products in the last few months, after persuading consumers to
spend a little more with a bigger investment in advertising.

The results of the household goods giants, along with
reports from other personal care product makers on Thursday,
point to a tentative recovery in U.S. consumer spending. But
the numbers also highlight how shoppers remain selective about
when and what they buy.

Profit at P&G, the maker of Tide laundry detergent, fell
less than anticipated [ID:nN28193572]. A profit increase at
toothpaste and dish-soap maker Colgate was even bigger than
analysts had expected. [ID:nN28194585]

“This idea that this economy is causing everyone to trade
down is a little bit overly general and too broadly applied,”
P&G Chairman and Chief Executive Bob McDonald said during a
conference call.

German rival Henkel (HNKG_p.DE: ), whose U.S. products
include Dial soap, also posted a strong finish to 2009.
[ID:nLDE60R2GV]

Still, P&G and Colgate kept their 2010 profit forecasts as
they digest new issues such as the impact from the devaluation
of Venezuela’s bolivar and prepare to launch new products.

“Obviously this recession was very, very severe but I think
the lesson is it is not going to result in a permanent change
in behavior of the consumer; rather (it would be) just a
cyclical or transient change,” said Hank Smith, chief
investment officer of Haverford Investments, which holds over 2
million P&G shares.

“As the economy improves, consumers will be back to having
a preference for branded, higher quality products,” he said.

However, the rebound in products such as shampoo and soap
has yet to take hold in the U.S. cosmetics category.

“I don’t see yet this (U.S.) recovery and I’m cautious on
how fast this will come,” Estee Lauder Cos Inc (EL.N: ) CEO
Fabrizio Freda told Reuters. “The U.S. is stable but the
consumer is not yet back.” [ID:nN28196844]

P&G said its sales this year should rise more than it had
previously anticipated, while Colgate expects volume increases
in all of its businesses and Henkel projected higher earnings.

On the New York Stock Exchange, P&G rose 2.17 percent to
$62.13, Colgate climbed 0.55 percent to $80.83, and Estee
slipped 1.19 percent to $53.00 at mid-afternoon. Henkel rose
2.6 percent to 37.20 euros in Frankfurt floor trade
(HNKG_p.F: ).
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For a graphic on P&G and Colgate, click on:
http://link.reuters.com/taf46h
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PROMOTIONAL CADENCE

P&G and Colgate have felt pressure since late 2007 as
consumers bought cheaper products to save money. Colgate’s
portfolio has been more resistant to such trends since most of
its products, except for pricey Hill’s pet food, are less
discretionary.

Across the consumer goods industry, companies must also
respond in a growing marketing war, as rivals increase
advertising, promotions and new products.

P&G’s launches include updated Pampers diapers and Fekkai
shampoo, while Colgate is bringing out new kids’ toothpaste and
toothbrushes, some based on the popular Bakugan action figures,
cards and games.

Energizer Holdings Inc (ENR.N: ), Estee Lauder, Elizabeth
Arden Inc (RDEN.O: ) are among the other personal care product
makers beefing up such efforts.

Estee Lauder posted a sharp rise in quarterly profit, aided
by sharp growth in Asia and at airport stores. Late Wednesday,
Arden’s higher profit also topped expectations.
[ID:nN27127104]

BY THE NUMBERS

P&G’s sales rose 6.4 percent to $21.03 billion, falling
short of analysts’ forecast $21.07 billion, according to
Thomson Reuters I/B/E/S. Organic sales, which exclude currency
fluctuations, acquisitions and divestitures, rose 5 percent, as
did the volume of goods sold.

P&G still expects to earn $4.02 to $4.12 per share in
fiscal 2010 which ends in June. It now expects organic sales to
rise 3 to 5 percent this year, one percentage point more than
before.

For the current fiscal third quarter, P&G estimated
earnings of 77 cents to 82 cents per share, below analysts’
target of 85 cents. P&G said organic sales should rise 4 to 6
percent.

Colgate’s sales rose 11.4 percent to $4.08 billion, meeting
expectations. The volume of goods sold rose 3 percent.

One area of concern at Colgate is Hill’s, whose sales and
volume fell. The company has lowered prices and resized
packages to win back consumers in that premium segment.

Stock News

(Reporting by Jessica Wohl; Additional reporting by Eva
Kuehnen in Frankfurt; Editing by Michele Gershberg, Dave
Zimmerman and Richard Chang)

WRAPUP 3-P&G, Colgate results beat, consumers spend more