By Jessica Wohl

"We expect the environment will remain difficult and highly volatile - at least in the near term," Chairman and Chief Executive A.G. Lafley said in a statement.

In an effort to curb spending, consumers are using up what they have in their pantries rather than stocking up on items such as shampoo and detergent. Retailers are buying less in line with decreased demand and, at the same time, a stronger dollar lessens the value of sales outside the United States.

The world's largest consumer products maker posted a 53 percent jump in quarterly profit driven by a gain from the sale of its Folgers coffee business.

P&G earned $5 billion, or $1.58 per share, in its fiscal second quarter, compared with a profit of $3.27 billion, or 98 cents per share, a year earlier.

P&G had forecast earnings of $1.58 to $1.63 per share. The results include a gain of 63 cents per share from the sale of Folgers to JM Smucker Co .

Earnings from continuing operations totaled 94 cents per share, compared with average analyst forecast of 99 cents per share, according to Reuters Estimates.

Sales fell 3 percent to $20.37 billion, while volume dropped 3 percent. Organic sales, which exclude the impact of acquisitions, divestitures and foreign exchange, rose 2 percent.

In December, P&G said second-quarter organic sales growth would fall short of its forecast range of 4 percent to 6 percent.

On a net basis, sales fell in every unit except for baby and family care, where sales rose 3 percent.

P&G expects fiscal 2009 sales to be flat to down 4 percent. It forecast organic sales growth of 2 to 5 percent, while organic volume should be flat to down 2 percent. The company still expects foreign exchange to reduce sales by about 5 percent.

P&G said it is comfortable with analysts' current consensus estimate of $4.29 per share for the year, which ends in June. P&G lowered its own guidance to a range of $4.20 to $4.35 per share from a range of $4.28 to $4.38 per share.

P&G forecast third quarter earnings of 78 cents to 86 cents per share, including Folgers-related restructuring charges. It said total sales should fall 2 percent to 7 percent in the quarter.

Shares of P&G, a component of the Dow Jones industrial average <.DJI>, were down 3 percent at $56.40 in pre-market trading.

(Reporting by Jessica Wohl; Editing by Derek Caney)