Aug. 5 (Bloomberg) -- Procter & Gamble Co., the world's largest consumer-products company, posted fourth-quarter profit that rose more than analysts estimated and said earnings may increase as higher prices and the dollar's decline boost revenue.

P&G advanced 3.3 percent in New York trading today after saying net income jumped 33 percent in the quarter through June to $3.02 billion, or 92 cents a share. Excluding a tax benefit, profit beat the average estimate of analysts by 2 cents. Sales climbed 10 percent to $21.3 billion.

Chief Executive Officer A.J. Lafley's strategy of raising prices on Cascade dishwashing detergent, Iams pet food and Gillette razors helped counter record costs for oil used in plastic packaging and pulp for Bounty paper towels and Charmin toilet paper.

``Considering the cost environment Procter is in, the fact that they are posting these kinds of numbers is admirable,'' Matthew Kaufler, a money manager with Rochester, New York based Clover Capital Management Inc., said in an interview. His firm owns P&G shares.

For 2009, higher prices will add 3 percent to sales, while currency gains against the dollar will add 2 percent to 3 percent, the company said today on a conference call with analysts and investors. Raw-material costs will probably increase by $3 billion in 2009, double the gain a year earlier, the company said. In June, P&G predicted an increase of ``over $2 billion.''

Price Increases

The price increases won't cover all of the higher raw- material costs, and raising prices more is ``risky,'' P&G said. The effects will be apparent later this year, the company said.

P&G rose $2.15 to $67.97 at 4:01 p.m. in New York Stock Exchange composite trading. The shares were down 7.4 percent this year through yesterday, compared with a 12 percent decline on the Dow Jones Industrial Average.

For the three months through September, P&G said earnings per share may be 98 cents to $1, compared with the $1 average estimate of analysts.

For the year through June 2009, the company forecast earnings of $3.80 to $3.87 a share, excluding one-time gains and costs, compared with its projection earlier this year of $3.80 to $3.85. Analysts estimated $3.86.

Beating Estimates

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 earnings beat the average 78-cent earnings estimate of 17 analysts surveyed by Bloomberg. Analysts predicted sales of $21 billion, the average of 12 projections. Profit a year earlier was $2.27 billion, or 67 cents a share.

Higher prices added 3 percent to sales, while foreign currency gains against the dollar added 6 percent in 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 intends to raise prices in China by an average of 3 percent, including a 20 percent increase for Pantene hair products.

More than half of P&G's sales come from overseas and benefited from foreign currency gains against the dollar. About 30 percent of total sales come from emerging markets such as Russia and Latin America, it said. Consumers are still buying P&G's products in emerging markets, although they have traded down to lower-priced goods, the company said.

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.

Pulp prices rose 1.4 percent in the 12 months to June 30. Oil prices rose 98 percent.

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

Last Updated: August 5, 2008 16:25 EDT