P&G REPORTS FISCAL YEAR AD SPENDING WAS UP

Fourth-Quarter Earnings Beat Expectations

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CINCINNAT (AdAge.com) -- Procter & Gamble Co. said global advertising spending in the fourth quarter was about the same as last year despite the acquisition of Clairol hair-care products.

The packaged-goods giant today reported fourth-quarter earnings were ahead of analyst expectations.

Sales up 6%
For the full fiscal year

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Marketer Expects Ad Spending to Remain High
ended June 30, P&G Chief Financial Officer Clayton Daley said ad spending was up both in absolute terms and as a percent of sales. Sales were up 6% for the quarter to $10.2 billion. But net sales would have been down slightly if not for gains from acquisitions and benefits from a comparison to a year-ago period when P&G wrote off more than $200 million for promotional expenses for this year's discontinuation of Olay cosmetics and other products.

Fourth-quarter net income was $910 million, or 64 cents a share, up from a loss of $320 million a year ago in a quarter when P&G took $1.1 billion in restructuring charges. Pro forma net income, which excludes restructuring charges, rose 22% to $1.09 billion, or 77 cents a share, beating consensus estimates by 3 cents.

Predicts earnings, sales growth
P&G reiterated projections of sales growth of 4% to 6% in fiscal 2003 and earnings growth, excluding restructuring charges, in the low double digits.

Chairman-CEO A.G. Lafley said he expects pricing and promotion pressure to subside some in 2003, with sales to grow within 1 to 2 points of volume for the year, though he said P&G has stepped up trade promotion behind new initiatives, which, he said, "has been paying off really well."

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