Proctor & Gamble CFO: Company Doesn't Need Acquisitions to Boost Profits

Tony Dejak

A shopper walks past a display of Folgers Coffee in the Market at Reserve Square in Cleveland Thursday, Dec. 9, 2004. Procter & Gamble Co., announced Thursday a 14 percent price increase for its Folgers roast and ground coffee, the biggest rise in a decade, because of sustained increases in the commodity cost of green coffee. (AP Photo/Tony Dejak)

Clayton Daley, Jr. Procter & Gamble’s chief financial officer, told CNBC’s “Squawk Box” that the company doesn’t need to make future acquisitions to boost profits.

“There’s still some hard lifting to do to get the Gillette acquisition done with excellence,” Daley said Tuesday. “We do not need acquisitions to deliver our growth strategy. We think if we deliver 4% to 6% sales growth, double-digit earnings per share growth, do a good job on cash flow, we’re going to do well in the long-term. If you look back historically, Proctor & Gamble has out-performed the S&P by over 200 basis points over five-, 10-, 15-, 20-, 25- and 30-year periods. That’s a great track record. We think we can keep (it) up.”

Procter & Gamble, a Dow component, reported third-quarter net income of $2.51 billion, or 74 cents a share, compared with $2.21 billion, or 63 cents a share, for the same period a year ago. Revenue increased 8% to $18.69 billion. The consensus Wall Street earnings estimate was 74 cents a share.

“The domestic homecare business is doing well,” Daley said. “The developing markets, as a group, are doing double digits and it’s clearly one of the things that’s helping us get to the upper end of our ranges.”

He said energy and commodity prices are up and higher costs have been priced into all products.

“There are two things you’re trying to do (with pricing),” he said. “You’re trying to recover commodity and energy prices when you need to. When you have new products – great innovation in the marketplace – that’s when you’ll try to price up, trade up the consumer when they’re getting a good value for a new and improved product.”

Daley said Wal-Mart continues to be a good customer.

“Our interests and Wal-Mart’s are, to a degree, linked,” Daley said. “…Wal-Mart’s sales growth in the categories in which we do business seems to be good. We have a great business with Wal-Mart right now.”