By Shailaja Sharma and Nandita Bose
(Reuters) - Procter & Gamble Co
P&G, which derives roughly two-thirds of revenue outside the United States, said the devaluation of almost every currency in the world versus the U.S. dollar hurt earnings, with the Russian ruble leading the way.
"This is the most significant fiscal year currency impact we have ever incurred," Jon Moeller, chief financial officer said in an earnings conference call.
The dollar <.DXY> gained nearly 13 percent against a basket of major currencies in 2014, its strongest performance since 1997. For U.S.-based companies, the stronger dollar hurts the value of sales in overseas markets.
Procter & Gamble said the exchange rates would reduce full-year sales by 5 percent and profit by 12 percent, or at least $1.4 billion after tax. Out of that, $1 billion would be as a result of currency devaluation in six countries - Russia, Ukraine, Venezuela, Japan, Argentina and Switzerland.
Moeller said the impact from currency fluctuation will never go away fully and the company is working to further localise its supply chain and is building 20 new manufacturing plants in emerging markets.
Procter & Gamble said it held market share in Latin America, Europe, India, Middle East but lost share in China and Japan. The Chinese market has become very promotional in nature, he said.
The maker of Pampers diapers and Tide detergent also reported lower-than-expected revenue and profit for the second quarter ended Dec. 31.
Net sales fell 4.4 percent to $20.2 billion from a year earlier. Sales rose 2 percent on an organic basis in all businesses except beauty, hair and personal care due to lower demand for its Olay creams and other products.
Analysts on average had expected net sales of $20.62 billion, according to Thomson Reuters I/B/E/S.
Net profit attributable to the company fell about 31 percent to $2.37 billion, or 82 cents per share.
Core earnings fell to $1.06 per share, lower than the average analyst estimate of $1.13 per share.
In November P&G sold its Duracell battery business to Warren Buffett's Berkshire Hathaway. That loss resulted in a non-cash charge of $740 million, the company said.
P&G's shares were 3 percent lower at $86.80 in morning trading.
(Corrects net sales estimate to $20.62 billion from $2.62 billion in para 10. The error also appeared in an earlier version of the story)
(Reporting by Shailaja Sharma in Bengaluru and Nandita Bose in Chicago; Editing by Don Sebastian and Marguerita Choy)
