NEW YORK: Procter & Gamble yesterday announced plans to unload its Duracell battery business as it reported a big drop in earnings following a large asset write-down.
P&G, which makes Pantene shampoo, Tide detergent and other household staples, reported quarterly earnings of $20.1bn, down 34.2 percent from last year on slightly lower sales. The results covered P&G’s first quarter in fiscal year 2015.
The biggest factor behind the lower earnings was a $932m one-time charge to write down the value of its Duracell battery business, which P&G said it will hive off or sell.
P&G garners $2bn in annual sales from Duracell, said chief financial officer Jon Moeller, who described the enterprise as “very profitable.” P&G has a 25 percent market share in the global battery business.
Although Duracell is “very profitable,” P&G wants to focus on “even more attractive opportunities” in its portfolio, Moeller told reporters on a conference call.
P&G in August announced plans to cull 90-100 brands in order to better focus on its best prospects.
P&G said its “current preference” was to split batteries into a standalone company, perhaps in a spinoff to shareholders. But P&G said it had not reached a final decision on the exact plan and that a divestiture was also possible.
P&G chief executive A G Lafley described the company’s earnings more broadly as “in line with our expectations, despite a very difficult operating environment.”
P&G reported higher sales for its health care products (+6.0 percent) as well as its baby, feminine and family care segment (+1.0 percent).
AFP
