Aug. 5 (Bloomberg) -- Procter & Gamble Co., the world's largest consumer-products company, said fourth-quarter profit rose 33 percent after it increased prices to counter higher costs for plastic, energy and paper while the U.S. dollar's decline buoyed overseas sales.

P&G forecast first-quarter earnings per share of 98 cents to $1, which trailed the estimates of some analysts.

Net income in the fourth quarter jumped to $3.02 billion, or 92 cents a share, from $2.27 billion, or 67 cents, a year earlier, the Cincinnati-based maker of Tide laundry detergent and Head & Shoulders shampoo said today in a statement. Sales rose 10 percent to $21.3 billion from $19.3 billion.

Chief Executive Officer A.J. Lafley announced price increases on Pantene hair products, Gillette shaving cream and Ivory soap to counter the record cost of oil used in plastic packaging and pulp used in Bounty paper towels and Charmin toilet paper. More than half of P&G's sales come from overseas and benefited from foreign currency gains against the dollar.

``Inflation continues to worsen and the company is pricing accordingly to absorb some of the pressure,'' William Schmitz, a Greenwich, Connecticut-based analyst with Deutsche Bank AG, said in an Aug. 1 note to clients. He recommends investors hold the stock.

Stock Slips

P&G shed 65 cents, or 1 percent, to $65.17 at 7:30 a.m. before the start of New York Stock Exchange composite trading. The shares were down 10 percent this year before today, compared with a 15 percent decline on the Dow Jones Industrial Average.

Excluding a 12-cent-a-share tax benefit, P&G earned 80 cents in the fourth quarter, which ended June 30. On that basis, the average earnings estimate of 17 analysts surveyed by Bloomberg was 78 cents a share. Analysts predicted sales of $21 billion, the average of 12 projections.

The company raised prices on Cascade dishwashing detergent, Iams pet food and Gillette razors in the past year, helping bolster sales during the quarter.

P&G said last month it plans to raise prices again in September on fabric, hair care, bar soaps and shaving products by as much as 16 percent. The increases will be the steepest in at least 18 months.

P&G also plans to raise prices in China by an average of 3 percent, including a 20 percent increase for Pantene hair products.

The dollar's decline helped revenue by increasing the value of overseas sales when converted to the U.S. currency. The dollar dropped 12 percent against a basket of foreign currencies during the quarter.

To contact the reporter on this story: Carol Wolf in Cleveland at cwolf@bloomberg.net

Last Updated: August 5, 2008 07:37 EDT