Investing.com – Procter & Gamble stock (NYSE:PG) traded 2% weaker in Tuesday’s premarket as the company repeated its annual profit forecast while warning of higher commodity and transportation expenses.
The maker of Ariel detergents and Gillette razors is expecting commodity and freight costs in the current financial year to take $2.3 billion off its bottom line.
Higher prices of farm and non-farm commodities, metals and crude oil has meant more expensive raw materials for producers. Pricier crude not only raises transportation costs but it also means dearer chemicals that go into making P&G’s cleaning agents, plastics, packaging and other derivatives.
P&G expects 2022 all-in sales as well as organic sales growth of 3% at the midpoint of its guidance range.
Net sales in the first quarter rose 5% to $20.3 billion. Organic sales were higher by 4%, driven by a 2% increase in volumes, P&G Chairman, President and Chief Executive Officer David Taylor said. Price hikes helped to the extent of 1%. CFO Andre Schulten told the Wall Street Journal that he expects to pass more price rises on to customers in the coming weeks.
Adjusted earnings per share came in at $1.61. Both sales and profit were higher than estimates.