Gillette quarterly profit climbs

Gillette Co on Thursday posted stronger-than-expected quarterly profit, driven by sales of higher-priced products such as its battery-powered M3Power men's razor and hurricane-spurred sales of Duracell batteries.
Gillette, whose shares rose 4 percent on Thursday morning, posted results on the heels of bleak forecasts from consumer products companies such as Colgate-Palmolive Co, Unilever NV and Kimberly-Clark Corp as the sector grapples with higher raw-materials costs.
Boston-based Gillette's third-quarter net income rose to $475 million, or 47 cents per share, compared with $416 million, or 41 cents, a year earlier, the company said.
Analysts expected Gillette, whose other products include Venus women's razors and Oral-B toothbrushes, to earn 41 cents to 45 cents per share, with a mean target of 43 cents, according to Reuters Estimates.
"Duracell was the major source of upside, with both revenue and operating margins far exceeding our expectations," said CSFB analyst Lauren Lieberman, who has an "under-perform" rating on the company.
"We raised our earnings estimates in mid-September to try and account for the positive impact of the hurricane season this year, but clearly we did not raise estimates enough," she said.
Sales rose 12 percent to $2.69 billion, with the weak dollar adding 4 percentage points to sales growth, the company said. A weaker dollar lifts the dollar-value of sales in other currencies. Gillette said it had sales strength Europe, Turkey, Russia and Latin America.
The sales beat analysts' mean forecast of $2.54 billion.
Blade and razor sales rose 7 percent to $1.11 billion and profit in the unit rose 5 percent. Battery sales rose 15 percent to $592 million and profit in the unit rose 52 percent.
The company said it is feeling pressure in the battery market from Energiser Holdings Inc's promotional activity and zinc battery sales taking away from alkaline. Gillette said it would do what it takes to defend its share in the battery market.
"We look forward to very strong results for the year, which should position us for another solid year in 2005," Chairman, President and Chief Executive James Kilts said in a statement.
Gillette shares rose $1.58 or 4 percent to $41.50 on the New York Stock Exchange on Thursday morning.