NEW YORK — Procter & Gamble Co. said Friday that it is rolling back some price increases and focusing on introducing new products in developed markets as the world’s largest consumer product maker seeks to reignite market share growth.
The maker of products ranging from Bounty paper towels to Luvs diapers also lowered its guidance below expectations for the fiscal year as it its third-quarter net income dropped 16 percent, hurt by restructuring charges and continued high costs for items like diesel fuel and packaging.
Consumer product companies across the board have been raising prices to deal with higher costs for materials like pulp, fuel and packaging. P&G’s rival Kimberly-Clark said last week that higher prices helped boost its quarterly earnings 34 percent. But results for P&G, which has an arsenal of products that include Tide detergent and Olay skin cream, illustrate that even big companies that sell trusted brands can lose customers to lower-priced rivals when they raise prices.
The Cincinnati-based company said its overall market share slipped in North America, which has seen stagnant growth. About 55 percent of its categories lost market share. P&G has focused on emerging markets for more growth — it says emerging markets will account for 37 percent of its annual sales by the end of the fiscal year.
P&G said it is rolling back prices in six categories: Powdered laundry detergent in the U.S., laundry products in Mexico and the U.K., and North American oral care, dish care and blades and razors.
Still, most price increases have stuck. While the company gained $3.5 billion in revenue through the increases, the rollbacks are worth about $100 million to $200 million, the company said in a call with reporters.
“We do not currently expect a broad scale reversal of the price increases we implemented over the past five quarters or those we’re implementing right now,” said chief financial officer Jon Moeller in a call with investors.
The company said net income fell 16 percent to $2.41 billion or 82 cents per share during the January to March quarter. That compares with $2.87 billion or 96 cents per share last year.
Results were impacted by a restructuring plan by P&G that involves cutting 5,700 jobs and saving $10 billion by the end of the fiscal year ending 2016. Excluding costs related to a cost-cutting plan, earnings amounted to 94 cents per share. That was a penny per share higher than analysts expected, according to a FactSet poll.
Revenue rose 2 percent to $20.19 billion. Analysts expected $20.35 billion.
One bright spot during the quarter was P&G’s North American laundry business. Its new Tide pods single-dose laundry detergent has captured 67 percent on the unit-dose market in one month, P&G says. The company hopes the pods will eventually account for 30 percent of the U.S. laundry business.
Executives told analysts in a call that they plan to drive growth in North America with more new products across a range of brands.
“Innovation as we’ve many times is the best antidote to sluggish growth in developed markets,” said Moeller. “We’re upgrading existing products with innovations like the Crest and Oral-B Pro(equals)Health Clinical lineup and a significant performance improvement across the Bounty franchise.”
In 2012, P&G expects net income of $3.82 to $3.88 per share, excluding one-time costs, down from prior guidance of $3.93 to $4.03. Analysts expect net income of $3.99 per share.
For the fourth quarter, the company expects adjusted net income of 79 cents to 85 cents per share. Analysts expect 94 cents per share.