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P and G profits soar past expectations

Thursday, October 25 16:15:48

Procter and Gamble's profit rose more than expected, indicating that the world's largest household products maker is making progress after coming under pressure from activist investor William Ackman, and its shares soared to the highest level in four years.

Rival Colgate-Palmolive Co, meanwhile, said it plans to cut about 6 percent of its workforce over the next four years as it strives to operate more nimbly as economies slow in many countries. Its quarterly profit matched expectations.

Several consumer goods makers are trimming jobs, including P and G, as concerned consumers hold off on some purchases and growth slows in major markets such as China.

P and G is on track to cut 4,200 jobs by the end of October on its way to eliminating 5,700 jobs by the end of its fiscal year. On Wednesday, Kimberly-Clark Corp said it would eliminate 1,300 to 1,500 jobs as it leaves some low-margin businesses in Europe. Colgate's plans, including moving away from single-country units toward regional hubs, should lead the toothpaste maker to trim about 2,300 jobs by the end of 2016.

Shares of P and G rose 4 percent to $70.83 on Thursday, their highest level since October 2008. Colgate's shares fell 2.9 percent to $103.44.

"It wouldn't surprise me if we're seeing some people saying it is time to sell some Colgate, buy some Procter, given Colgate's outperformance year to date," said JP Morgan analyst John Faucher, who has a "neutral" rating on Colgate and an "overweight" rating on P and G. (C ) Reuters