P&G writes down Gillette business, earnings top estimates

New York (AFP) –


Procter & Gamble shares surged early Tuesday after reporting a jump in sales despite a hefty charge on the Gillette shaving business that pushed results into the red.

The consumer products giant, with brands like Tide detergent and Bounty paper towels, said sales rose 3.6 percent in the latest quarter to $17.1 billion, with gains in four of five business segments.

Shares jumped 4.7 percent to $121.19 in pre-market trading following the results, which topped expectations excluding one-time items.

But the company reported a $5.2 billion quarterly loss following an $8 billion accounting hit on the lower value of the Gillette shaving business.

The company said the non-cash charge was due primarily to currency devaluations since P&G acquired Gillette in 2005.

The Gillette write-down also comes on heels of weakening sales in the grooming segment the last few years.

The company has pointed to a greater social popularity of beards and facial hair, but the business also has been challenged by newer competitors in developed markets, such as online-focused Harry's and the Dollar Shave Club.

P&G chief financial officer Jon Moeller described the write-down as driven by accounting rules and stressed that grooming remains a viable long-term business that is among the company's most global products.

"Grooming continues to be a very attractive business," he said on a conference call with reporters.