Profits Up Sharply At Iams, Flat At Hill’s

Iam’s reports high profit.

Procter & Gamble Co. reported a sharp increase in net profit for its snack and pet food unit, which includes Iams and Eukanuba pet foods, while rival Colgate-Palmolive showed relatively flat operating profit for its Hill’s Pet Nutrition business for the quarter ended Dec. 31, 2009.

P&G reported net earnings for its snacks and pet care business increased 56 percent for its second quarter to $98 million, a spike driven by price increases, lower commodity costs and manufacturing cost savings. Net sales for the unit increased six percent to $835 million while volume sales edged up by 1 percent. Pet care volume for the quarter increased in the mid-single digits, boosted by product initiatives and increased promotional activity; human snacks volume declined by the low-single digits, P&G reported.

“Pet care delivered solid volume growth in the mid-single digits behind the continued strength of the Iams Proactive Health, Iams Premium Protection and Eukanuba Naturally Wild initiative,” said Teri List, P&G senior vice president and treasurer during the company’s second quarter conference call with financial analysts. “P&G all outlet share of the pet nutrition business is up versus prior year and is approaching 10 percent.”

Year-to-date, snack and pet sales were down 1 percent to $1.6 billion and net earnings were up 46 percent to $172 million.

Year-to-date, P&G reported overall net income of $8 billion on sales of $40.8 billion, compared to net income of $8.4 billion on sales of $40.7 billion in the year-ago six-month period.

Colgate reported sales for Hill’s declined 1.5 percent to $565 million for its fourth quarter from $574 million in the year-ago period as unit volume fell 8.5 percent. Price increases and foreign exchange benefits helped offset the volume drop, the company reported.

Operating profit for the quarter slipped to $148 million from $151 million in the year-ago period, hurt by decreased sales and increased selling and administrative expenses.

The company noted strong sales performance of its expanded Science Diet Simple Essentials Treats Canine line in the U.S. and its Science Plan Snacks Canine line and Science Plan Healthy Mobility Canine food internationally.

Hill’s also launched its Prescription Diet j/d Feline in January at the North American Veterinary Conference and plans to launch Science Diet Small and Toy Breed Canine in early 2010.

For the year, Hill’s posted operating profit of $555 million on sales of $2.13 billion, compared to operating profit of $542 million on sales of $2.15 billion.

Overall, Colgate posted net income of $2.3 billion on sales of $15.3 billion for 2009.


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