P&G sells less snacks in first Quarter;Overall Q1 Sales and EPS Exceed Expectations

Procter & Gamble Company (NYSE: PG) reported net sales of $19.8 billion for the July - September quarter which exceeded the Company's guidance. Organic sales growth was up two percent versus a guidance range of flat to minus three percent on better than expected results across most business segments. Diluted net earnings per share increased three percent to $1.06, above the Company's guidance range of $0.95 to $1.00. The Company raised its outlook for the October - December quarter and fiscal 2010 organic sales growth citing modestly higher expectation for market growth. The Company also increased the low end of its fiscal year guidance range by $0.03 per share to reflect the higher top-line growth projection.

"Our September quarter results give us encouragement we are making the right choices to grow market share profitably," said President and Chief Executive OfficerBob McDonald. "We are investing in innovation, expanding our portfolio and improving consumer value to serve more consumers, in more parts of the world, more completely. We are driving simplification and improving execution while leveraging scale to create cost efficiencies that help fund these investments and accelerate growth."

Specifically on the snack segment the P &G news release states:

Volume in Snacks decreased double digits due to lower merchandising activity inNorth Americafollowing the Super Stacks initiative, which included a price increase, and market contractions in CEEMEA.

Snacks and Pet Care net sales were down six percent for the quarter to$755 millionon a 10 percent decline in unit volume. Organic sales declined three percent due to a decline in Snacks, partially offset by growth in Pet Care. Unfavorable foreign exchange reduced net sales by three percent. Price increases to offset increased commodity costs and currency devaluations contributed six percent to net sales.

Net earnings [for Snacks and Pet Care] were up 35 percent in the first quarter to $74 million resulting from price increases, lower commodity costs and manufacturing cost savings.

Previous quarter (Q4) P&G snack sales decreased as well