Dallas, Texas 10/25/2013 (Financialstrend) – As of close of business on October 25, the shares of The Procter & Gamble Company (NYSE:PG) were trading at $80.61. The $220 billion market cap company has been losing ground to competition with respect to sales on a quarter on quarter basis. Another spot of bother for the firm is the drop in its net income during 2Q ($1.8 billion) which ended on June 30.
P&G vs. Unilever
Unilever the British-Dutch player is being forced to respond to P&G’s desperate measure of slashing prices of goods in U.S. The personal products major has resorted to price mark downs in order to win back lost market share. Analysts believe that the price slashing by P&G has impacted Unilever business resulting in the lowest quarterly revenue increase it has recorded over the last few years. Speculation is rife that a price war between the two giants is in the offing and could spread to other countries where they compete head on. Few other analysts are of the opinion that Unilever will not respond with price cuts but try to endure the loss in sales but maintain its margin in the hope that undercutting of price will ultimately make P&G business unviable
Selling the lams division
Trade gurus are also predicting that P&G might start to shed some of its noncore assets like lams pet-food division in order to cut down costs and increase its focus on growing its traditional business. The potential buyer is rumored to be Del Monte Foods, which is planning to grow its pet products business. This move can be a win-win situation for both P&G and Del Monte Foods. It could fetch about $2.5 billion for P&G which would come in handy for CEO Lafley who was brought back to rescue the falling company sales. For Del Monte Foods the transaction would strengthen its position in the lucrative pet food industry.
Rebound round the corner
P&G through its various strategic measures is trying to win back its market share and increase its earnings per share.
