Jan. 30 (Bloomberg) -- Procter & Gamble Co., the largest U.S. consumer-products maker, reported higher second-quarter profit and raised its earnings and sales forecasts on demand for Fusion razors and Tide detergent.

Net income increased 12 percent to $2.86 billion, or 84 cents a share, from $2.55 billion, or 72 cents, a year earlier. Profit for the rest of the year may increase as much as 15 percent, the Cincinnati-based company said in a statement today.

Sales increased 7.6 percent to $19.7 billion in the three months through December. Chief Executive Officer A.G. Lafley, who engineered the 2005 acquisition of Gillette Co. for $57 billion, expects the unit's expertise in marketing razors to help P&G sell Olay lotion and Crest toothpaste.

``The consistency is still there,'' said Alan Kral, who holds 65,000 P&G shares among the $725 million he helps manage at Trevor Stewart Burton & Jacobsen in New York. ``In an environment where they are still fitting in the Gillette acquisition, they were able to increase sales across the board.''

Revenue rose 7.6 percent to $19.7 billion in the three months through December, the slowest pace in five quarters. The company had projected sales growth of 5 percent to 8 percent.

Earnings beat the 83-cent average estimate of 12 analysts in a Bloomberg survey. In December, P&G forecast earnings per share of 81 cents to 83 cents.

P&G increased its 2007 profit forecast to $2.99 to $3.03 a share, up 13 percent to 15 percent from 2006. It earlier projected full-year profit of $2.97 to $3.02. Analysts were estimating $3.02 a share.

Higher Sales

The company said revenue excluding acquisitions and sales of units will rise 5 percent to 6 percent, compared with a previous forecast of 4 percent to 5 percent growth.

Shares of P&G, which also makes Pampers diapers and Pringles chips, fell 29 cents to $64.59 at 4 p.m. in New York Stock Exchange composite trading. The stock increased 9.4 percent from the October 2005 purchase of Gillette through yesterday.

The Fusion razor is P&G's biggest product introduction since the acquisition of Gillette. Lafley, 59, expanded into the $11 billion global razor and blades market as he pushed P&G's biggest brands into markets growing faster than the U.S.

Consumers in North America bought more than $400 million in Fusion razors and blades in the year since their introduction. Fusion's U.S. share of the men's razor market was 51 percent, P&G Treasurer John Goodwin told analysts today on a conference call.

P&G is expanding distribution of Fusion to another 11 Western European markets, as well as Australia, South Korea, Singapore and Eastern Europe this quarter, Goodwin said. Lafley said 86 percent of men who try Fusion continue to use it.

Rapid Distribution

Fusion was distributed faster than any other Gillette product, with more than 90 percent of U.S. stores selling the razor within three days of P&G shipping the product, spokesman Paul Fox said in a Jan. 22 interview.

``The business is good when we've got good innovation programs and good marketing programs,'' Chief Financial Officer Clayton Daley said in an interview.

Cost savings from the Gillette acquisition will accelerate, according to Nik Modi, an analyst at UBS Securities LLC in New York who is among 12 analysts tracked by Bloomberg recommending investors buy P&G shares. Four others say ``hold.''

Colgate Profit

Colgate-Palmolive Co., the world's biggest toothpaste maker, said fourth-quarter profit rose 11 percent to $401.2 million, or 73 cents a share, on record sales in Latin America and new products such as the Colgate 360 degree manual toothbrush. Total sales rose 10 percent to $3.21 billion, the New York-based company said today in a statement.

All of P&G's business units reported higher sales, led by Pantene Color Expressions and Olay Definity and Regenerist lotions. That spurred a sales gain of 8 percent in the company's beauty division.

Fabric care and home care revenue climbed 11 percent on new Gain Joyful Expressions laundry detergent and Febreze Noticeables air fresheners.

Demand for Fusion razors lifted Gillette sales 11 percent, while Duracell batteries and Braun home appliances posted a 5 percent sales gain, helped by the weaker dollar.

A falling dollar helps U.S. companies that sell their products overseas, making them more competitive. They benefit as sales in stronger currencies are translated back into dollars. The euro increased 8.5 percent against the dollar during the quarter.

To contact the reporter on this story: Chris Burritt in Greensboro, North Carolina at 1348 or cburritt@bloomberg.net.

Last Updated: January 30, 2007 16:16 EST