http://www.nytimes.com/2014/10/25/business/Procter-Gamble-Quarterly-Earnings-Report.html 2014-10-24 17:01:50 Procter & Gamble to Spin Off Duracell Unit The consumer products company, which reported a drop in earnings on Friday, has been trimming its product line. === For months, analysts have been playing a guessing game: Which brands will On Friday, the company at least partly answered that question when it confirmed plans to spin off the battery line Duracell, one of the company’s most well-known brands but one that never really fit with its core portfolio of personal care products like diapers and toothpaste. Duracell will become a stand-alone company, Procter & Gamble announced in reporting its quarterly earnings. Investors will have the option of exchanging some or all of their P.&G.; shares for shares of the new Duracell. The company also said that it had started disengaging from the battery business in August when it reached an agreement to sell its portion of a China-based joint venture for an undisclosed amount. The news was a bright spot in an otherwise weak first quarter, said April Scee, an analyst with BTIG. “This was not a perfect quarter,” Ms. Scee said in an earnings memo. “The highlight of the statement is likely the earlier-than-expected announcement that Duracell will exit the portfolio.” The company met average analysts’ average earnings per share estimates of $1.07, although it narrowly missed revenue predictions of $20.83 billion, according to data from Reuters. P.&G.; Procter & Gamble’s shares were up more than 3 percent in morning trading. All consumer products companies have struggled in the United States, as Americans continue to spend warily after the 2008 recession. To help combat this slump, Procter & Gamble announced in August that it would shed about half of its brands to focus on a core portfolio of about 70 to 80 core products, like the detergent Tide. While most of those were expected to be small, obscure brands like Zooth, a children’s oral care brand, and the Southeast Asian laundry detergent Trojan, analysts immediately suspected that Duracell could come up on the chopping block. Procter & Gamble does not break out earnings for the battery brand, which it acquired as part of its “I think it’s actually good to divest a business that is slower growth, heavy assets, and limited innovation potential,” said Ali Dibadj, an analyst with Sanford C. Bernstein & Company, who estimated that Duracell generated about $2.5 billion in sales for P.&G.;'s 2014 fiscal year. Procter & Gamble and other manufacturers, like Johnson & Johnson and Kimberly-Clark, have doubled down on what they do best, and eliminated assets and product lines that did not fit into a core strategy. Kimberly-Clark, the maker of Depend diapers, plans to complete a spinoff of its health care business next month. Johnson & Johnson has increased its focus on products like Listerine, coming up with new ways to market a mouthwash that has not fundamentally changed in nearly a century in order to break into new markets like China. “China continues to be an attractive market,” said P.&G.;'s chairman and chief executive, A.G. Lafley, during a conference call with analysts on Friday.