The Procter & Gamble Company announced that it delivered net sales growth of 6% for the October – December quarter to $21.0 billion. Organic sales grew 5%— the top of the company’s guidance range. Diluted net earnings per share were $1.49 and diluted net earnings per share from continuing operations were $1.01. Core EPS increased 22% to $1.10 for the quarter, above the company’s guidance range, on better than expected sales growth and margin expansion. The company raised its expectations of fiscal 2010 organic sales growth and Core EPS.

Beauty net sales increased 7% in the second fiscal quarter to $5.2 billion on a 2% increase in unit volume. Organic sales increased 4% versus the prior year period. Price increases, primarily in developing regions to offset currency impacts, and favorable foreign exchange added 2- and 3%, respectively, to net sales growth. Organic volume, which excludes acquisitions and divestitures, was up 3% behind mid-single-digits growth in developing regions. Organic volume in Hair Care increased mid-single digits mainly due to strong growth in Asia. Volume in Female Beauty increased low single digits primarily due to higher shipments of female skin care and personal cleansing products. Volume in Salon Professional was down double digits due to the exit of non-strategic businesses, while organic volume declined mid-single digits mainly behind continued market contractions. Volume in Prestige decreased low single digits as continued contraction of the fragrance market was mostly offset by trade inventory reductions in the prior year period. Net earnings were up 7% versus the prior year period to $876 million on higher net sales and operating margin expansion, partially offset by a higher tax rate. Gross margin expansion, primarily due to price increases and manufacturing cost savings, was partially offset by higher SG&A as a percentage of sales behind increased marketing spending and higher foreign currency exchange costs.

Grooming net sales grew 3% to $2.1 billion for the quarter on a 2% decline in unit volume. Organic sales were consistent with the prior year period as volume declines and negative mix impacts were offset by price increases. Favorable foreign exchange contributed 3% to net sales. Price increases, taken mainly in developing regions to offset currency impacts, added 4% to net sales for the quarter. Negative mix impacts reduced net sales by 2% as volume declines disproportionately affected developed markets and premium shaving systems, both of which have higher than segment average selling prices. Male Blades and Razors organic volume was in line with the prior year period as market contractions in developed regions and share losses in Western Europe were offset by initiative-driven growth in developing regions. Volume declines in premium shaving systems were mostly offset by growth in lower priced systems and disposables. Male Personal Care volume declined high single digits behind increased competitive promotional activity on shave preparation products and distribution declines on a non-strategic deodorant brand. Braun volume decreased low single digits behind a double-digit decline in developing regions mainly due to market contractions. Net earnings increased 10% to $433 million for the quarter due to net sales growth and operating margin expansion driven by higher gross margin, partially offset by higher SG&A as a percentage on net sales. Gross margin increased due to price increases and lower commodity costs. SG&A as a percentage of net sales increased behind higher foreign currency exchange costs, partially offset by lower overhead and marketing spending as a percentage of net sales.

“We are pleased with the top- and bottom-line underlying results for the quarter,” said chairman of the board, president and chief executive officer Bob McDonald. “Our investments in innovation, portfolio expansion, marketing support and consumer value are working. We continue to drive simplification and leverage our scale to create cost advantages and accelerate growth. While economic uncertainty remains, we’re confident these strategies will enable P&G to serve more consumers in more parts of the world, more completely and deliver profitable market share growth.”