"Gillette's 2nd-Qtr Net Rises 27%"...
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quote.bloomberg.com
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>>> Gillette's 2nd-Qtr Net Rises 27% as Mach3 Sales Gain (Update3)
By Steve Matthews
Boston, July 23 (Bloomberg) -- Gillette Co. said second- quarter profit climbed 27 percent as Mach3 razor sales rose and costs fell. The company's shares gained as much as 7 percent, their biggest increase in about 18 months.
Net income at the world's largest razor maker rose to $293 million, or 28 cents a share, from $232 million, or 22 cents, a year earlier, the company said in a statement. Sales increased 5.3 percent to $2.02 billion from $1.92 billion for Gillette, which also makes Duracell batteries and Braun appliances.
Chief Executive James Kilts boosted sales by increasing advertising 10 percent and adding new products, including the Mach3Turbo, a redesigned version of Gillette's four-year-old men's razor. Kilts, who took over 17 months ago, also has cut 3,700 jobs, closed six plants and reduced debt.
``Kilts is doing a great job,'' said John C. Thompson, of Thompson Plumb & Associates, whose $1.8 billion in assets included more than 350,000 shares at the end of March. ``He's taking a lot of costs out of the system and returning the company to historic levels of growth.''
Shares of Boston-based Gillette rose $1.73 to $30.73 in midmorning trading, after climbing to $31.02. They had declined 13 percent this year.
Profit from razors and blades rose 19 percent as sales gained 10 percent, helped by the Mach3Turbo. Profit at Duracell, Gillette's second-largest business, gained 12 percent on lower costs, while sales fell 2 percent, Gillette said.
Excluding a gain of $21 million, or 2 cents, from the sale of rights to a prescription cream that slows facial-hair growth for women, Gillette would have earned 26 cents a share, the company said. That is 1 cent more than the 25-cent average estimate of analysts surveyed by Thomson First Call.
`Good Progress'
Profit from toothbrushes and other dental-care products rose 11 percent, Gillette said. Earnings from Braun appliances, including electric shavers coffee makers, fell 8 percent. Profit from personal-care products such as Right Guard and Soft & Dri deodorants and antiperspirants fell 55 percent.
``We continue to make good progress in our turnaround efforts,'' Kilts, former Nabisco Holdings Corp. chief executive, said in the statement.
Kilts plans to cut corporate overhead spending by an additional $300 million to $350 million through 2006, Gillette officials said on a conference call. They didn't make any earnings forecasts for the current quarter or 2002.
The introduction of the Mach3Turbo, priced about 20 percent higher than the top-selling Mach3, will continue to help results, company officials said.
The Mach3Turbo line had 11 percent of the $765 million-a-year U.S. blade market in the 13 weeks ended June 15, according to ACNielsen research figures released by J.P. Morgan Securities Inc. That boosted Gillette's total share to 87 percent of the market from 84 percent a year earlier.
Gillette gets more than a third of its sales and more than half of its profit from razors and blades.
Duracell
Duracell was hurt by consumers switching from premium-priced Ultra batteries to its CopperTop line, and by competitors' discounts, Gillette said.
``The blade-and-razor business is very healthy,'' said Neal Goldner, an analyst with State Street Global Advisers, whose $770 billion under management includes Gillette 34 million shares. ``The battery business is still extremely promotional.''
The company said currency had little effect on results, an improvement from past quarters brought about by this year's 12 percent increase in the euro. <<< |
