• Procter & Gamble topped Wall Street's estimates for its fiscal first-quarter earnings and revenue.
• P&G raised its forecast for inflation, predicting that higher commodity and freight costs could hit fiscal 2022 earnings by $2.3 billion, up from its prior outlook of $1.9 billion.
• Price hikes helped offset higher freight costs but couldn't keep up with climbing commodity costs.

Procter & Gamble on Tuesday reported quarterly earnings and revenue that topped analysts' expectations, but higher costs weighed on the company's profits. 

The consumer giant also raised its forecast for commodity and freight costs for the remainder of the fiscal year, warning it believes inflation is still increasing.

Shares of the company fell 2.3% in premarket trading.

Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: $1.61 vs. $1.59 expected
• Revenue: $20.34 billion vs. $19.91 billion expected

P&G reported fiscal first-quarter net income of $4.11 billion, or $1.61 per share, down from $4.28 billion, or $1.63 per share, a year earlier. Analysts surveyed by Refinitiv were expecting earnings per share of $1.59.

Net sales rose 5% to $20.34 billion, topping expectations of $19.91 billion. Organic revenue, which strips out the impact of acquisitions, divestitures and foreign currency, increased by 4% in the quarter.

Price hikes on some of P&G's products, like Pampers diapers, contributed to organic sales growth by 1%. Higher prices offset increased freight costs during the quarter but couldn't keep up with climbing commodity costs. P&G CFO Andre Schulten said on a call with reporters that the company would raise prices on certain products within the beauty, oral care and grooming categories to deal with inflation. However, he said the company isn't intentionally prioritizing premium products because of supply chain constraints.

"As this pricing reaches store shelves we'll be closely monitoring consumption trends," Schulten said on the company's conference call. "While it's still early in the pricing cycle, we haven't seen notable changes in consumer behavior."

Schulten said the company will ramp up its productivity programs throughout the fiscal year and still plans to introduce innovation to improve value as the company raises prices.

P&G said that it now expects after-tax commodity costs of $2.1 billion and freight expenses of $200 million to weigh on its fiscal 2022 results. Last quarter, the company forecast that commodity and freight costs would hit its earnings by $1.9 billion.

"We base our forecast on spot rates, so we don't expect any easing on commodity cost forecasts," Schulten said.

Health care was the company's top-performing segment this quarter. The business unit, which includes brands like Oral-B and Vicks, saw organic sales growth of 7%.

The company's largest segment, fabric and home care, reported organic sales growth of 5%. The division includes Tide, Febreze and Mr. Clean products.

P&G's grooming business, which includes Venus and Gillette razors, saw organic sales increase by 4% during the quarter.

The company's beauty and baby, feminine and family care units both saw their organic revenue rise by 2%. The beauty segment, which includes Pantene and SK-II, saw higher organic sales across its hair-care and skin and personal-care divisions, driven by higher volume and innovation in hair treatments and conditioners. P&G said it saw more consumers buying its premium Pampers diapers and pants from the baby-care segment, but organic sales of Charmin toilet paper and Bounty paper towels fell as it spent more on promotions.

Despite higher costs, P&G reiterated its prior forecast for full-year earnings and revenue. P&G is calling for fiscal year sales to grow 2% to 4% from the prior year and core earnings per share to increase by 3% to 6%.

Read the full earnings report here.