P&G; Has $324-Million Loss, First Since 1949

Procter & Gamble on Monday reported a net loss of $324 million for the three months ended June 30 because of the expected costs of a sweeping restructuring of the consumer products giant.

The previously announced $805-million reserve to pay for P&G;’s restructuring reduced earnings by $459 million, resulting in the company’s first quarterly loss since 1949, P&G; spokeswoman Sydney L. McHugh said. In the same period last year, P&G; earned $127 million.

Net sales for the quarter rose 7% to $4.2 billion.

For the year ended June 30, P&G; posted net income of $327 million on net sales of $17 billion. The company earned $709 million on net sales of $15.4 billion in the previous year.

The restructuring, which will consolidate some P&G; factories that make similar products, “will result in a stronger, more competitive company and will set the stage for more vigorous growth in the current year and beyond,” P&G; Chairman and Chief Executive John G. Smale and President John E. Pepper said in a joint statement.

Analysts have agreed that the restructuring, which is similar to corporate overhauls announced by other consumer products companies, will improve earnings and boost P&G;’s competitiveness as it moves more heavily into health-care products.

One casualty of the restructuring so far is P&G;’s 56-year-old Long Beach factory, which employs 420 workers. That plant will wind down during the next year. The company also has announced that it will close three other factories among its 120 facilities.

Procter & Gamble is best known for such widely used products as Crest toothpaste, Ivory soap, Pampers diapers, Tide detergent and Head & Shoulders shampoo.

P&G; noted that its domestic consumer product divisions achieved record unit volume despite stiff competition, bringing domestic net earnings from operations, excluding the effect of the reserve, to $711 million, up 12% from the previous year. Net earnings from the firm’s international operations, excluding the effect of the restructuring, jumped 38% to $197 million.