Procter & Gamble Co. (PG) cut its outlook for the fiscal year on a recent slip in demand in developed markets and the need to backtrack on price increases in a half-dozen business lines, mostly in the U.S.

Price controls in Venezuela, which required price cuts of up to 25% on certain P&G products, also will weigh on results in what is currently a billion-dollar market for the company.

For the year ahead, the company lowered its full-year profit target to $3.82 to $3.88 a share. It had previously forecast earnings of $3.93 to $4.03 a share.

The lowered view, with fiscal 2012 per-share earnings seen flat to down 1%, once again disappointed investors, sending shares down 3.3% in recent trading to $64.69. It came after P&G reported a 16% drop in third-quarter earnings, when the company continued to deal with high commodity costs and took charges related to restructuring plans.

The outlook also raised questions as to whether P&G can capably confront such challenges and fend off competitors while the 175-year-old company undergoes a $10 billion restructuring program over the next four years. P&G executives said the company will continue to add new products, especially in struggling areas like the U.S. and its beauty care business, so sales don't suffer as P&G cuts costs.

"I personally don't think this restructuring program will get in the way of doing that," P&G Chief Executive Bob McDonald said Friday on an earnings call. "If anything, I think it will enable it."

P&G's is lowering prices and increasing promotions in categories where competitors like toothpaste-maker Colgate-Palmolive Co. (CL), Schick razor-owner Energizer Holdings Inc. (ENR) and laundry competitors Unilever PLC (UL, ULVR.LN) and Church & Dwight Co. (CHD) have dug in on their prices or promoted aggressively.

P&G is giving back $200 million of the $3.5 billion in price increases it has taken this year, a small piece of the pie. But the swift reversals show P&G moved too high in some areas, misjudging consumer and competitor response to its price increases and jeopardizing market share in some key categories.

"We had to put in place some remedial activity to regain the consumer value equation," McDonald said.

P&G executives said that the company is lowering prices in the powdered laundry business in the U.S.; oral care, automatic dishwashing detergent, and blades and razors in North America; and laundry divisions in the U.K. and Mexico.

The weak performance in those areas made P&G lose share in a majority of its markets. The company said it held or increased share in 45% of the categories and countries in which it competes; the figure would have been 55% if it just held share in the categories where the prices are being lowered.

For the quarter ended March 31, P&G reported a profit of $2.41 billion, or 82 cents a share, compared with a year-earlier profit of $2.87 billion, or 96 cents a share. Stripping out items like restructuring costs, P&G reported core earnings of 94 cents a share.

Net sales inched up 1.5% to $20.19 billion. Sales rose 3% on an organic basis, which excludes currency translation, acquisitions and divestitures. The company had forecast earnings of 89 cents to 95 cents a share on flat to 2% net sales growth.

For the year ahead, the company also lowered its full-year profit target, calling for earnings of $3.82 to $3.88 a share. It had previously forecast earnings of $3.93 to $4.03 a share.

-By Paul Ziobro, Dow Jones Newswires; 212-416-2194; paul.ziobro@dowjones.com

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