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P&G delivers profit, sales beat amid activist pressure

(Adds CEO's quote to CNBC, outlook; updates shares)

By Siddharth Cavale

July 27 (Reuters) - Procter & Gamble Co, which is under pressure from activist investor Nelson Peltz, reported another quarter of market-beating profit, helped by cost-cutting, and forecast a full-year profit that topped estimates.

The Tide detergent and Gillette razor maker's shares were up about 1 percent at $90.17 in afternoon trading on Thursday.

P&G's report comes amid rising pressure from investors, including Peltz, to prop up its stock price and sales, which have lagged those of peers such as Unilever Plc.

While P&G's organic sales rose 2 percent in the latest quarter, Unilever's increased 3 percent in the same period. P&G's shares, which have risen 6 percent this year, have also lagged the S&P 500, which is up 10.7 percent.

After more than four years of divestiture-driven sales declines, P&G reported net sales that were flat at $16.08 billion in the quarter, helped in part by demand for its beauty and fabric & home care products such as SK-II and Tide Pods.

P&G has been cutting costs and selling unprofitable brands to revive growth. Selling, general and administrative expenses fell 7 percent in the quarter.

"While P&G says it is addressing the underperformance issue, shareholders have heard similar promises in the past and results have not materially improved," Peltz, who owns a $3.3 billion stake, said in a statement following the report.

Earlier this month, Peltz said he was seeking a board seat to get P&G to cut costs more efficiently, but without replacing its chief executive David Taylor, any board directors, or breaking up the company.

"There's nothing incremental (Peltz has) offered. I want to prevent anything from derailing the work we're doing… The fact that he has good advice doesn’t mean we just add him to the board," Taylor told CNBC in an interview.

The company said it expected cost-cutting efforts to drive 5 percent to 7 percent growth in fiscal 2018 adjusted profit, which translates to $4.12-$4.19 per share.

Analysts on average were expecting $4.11 per share, according to Thomson Reuters I/B/E/S.

P&G also said it expected full-year organic sales growth to rise as much as 3 percent from 2 percent in fiscal 2017.

Net income attributable to the company rose 13.5 percent to $2.22 billion, or 82 cents per share. Excluding items, the company earned 85 cents per share.

Analysts on average were expecting 78 cents per share on revenue of $16.02 billion, according to Thomson Reuters I/B/E/S. (Reporting by Siddharth Cavale in Bengaluru; Editing by Saumyadeb Chakrabarty and Arun Koyyur)