{"id":119059,"date":"2021-07-30T16:48:12","date_gmt":"2021-07-30T16:48:12","guid":{"rendered":"https:\/\/fin2me.com\/?p=119059"},"modified":"2021-07-30T16:48:12","modified_gmt":"2021-07-30T16:48:12","slug":"pg-forecasts-higher-annual-earnings-despite-2-billion-input-costs","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/pg-forecasts-higher-annual-earnings-despite-2-billion-input-costs\/","title":{"rendered":"P&G forecasts higher annual earnings despite $2 billion input costs"},"content":{"rendered":"
(Reuters) -Procter & Gamble Co expects higher core earnings this year despite warning of a nearly $2 billion hit from rising commodity and transportation expenses, relying on price increases and cost cuts to cushion the hit to its margins.<\/p> Shares of the company, which also named a new CEO on Thursday, rose 2.7% to $143.28 after it reported fourth-quarter results that beat estimates.<\/p>\n Higher freight and commodity costs for everything from palm oil to plastics due to pandemic-led disruptions have forced many consumer goods firms to raise prices, including P&G, which hiked prices in emerging markets and on products such as Pampers diapers in the U.S. earlier this year.<\/p>\n P&G still faced significant input costs across most of its commodity basket, with pulp, resin and polypropylene being some of the top drivers, CFO Andre Schulten said on Friday.<\/p>\n The company also expects a $100 million higher transportation bill this year, mainly in the United States, where a driver shortage is causing disruptions, Schulten added.<\/p>\n Unilever and Reckitt Benckiser Group are some of the other major consumer goods companies to warn of soaring costs squeezing profits this year.<\/p>\n Consumer spending in the United States rose more than expected in June, partly due to higher prices, with annual inflation accelerating further above the Federal Reserve\u2019s 2% target.<\/p>\n P&G expects a roughly $1.9 billion after-tax hit from input costs this year, which it plans to offset through an increase in sales, cost cuts across the company and further price hikes.<\/p>\n On Thursday, the company said David Taylor would be stepping down as chief executive officer in November, handing over the reins to company veteran Jon Moeller.<\/p>\n Moeller, the company\u2019s current chief operating officer, said on Friday that he currently does not expect any major strategy changes after taking over.<\/p>\n Procter & Gamble forecast fiscal 2022 core earnings per share to rise 3% to 6%, to between $5.82 and $6.00, the mid-point of which was above the $5.90 that analysts were expecting, according to Refinitiv IBES data.<\/p>\n The company expects full-year net sales to rise 2% to 4%.<\/p>\n