Procter & Gamble reported better-than-expected quarterly revenue on Thursday, but its results did not allay concerns about loss of market share in its core business.

Shares of the consumer giant were down 2.86 percent in early morning trading on Thursday.

Net sales for the world's largest consumer products maker by market value rose 4.3 percent to $16.28 billion, compared with analysts' estimate of $16.21 billion in a Thomson Reuters survey.

Organic sales, which strip out the impact of currency and acquisitions, rose 1 percent. The consumer giant's Gillette shaving business continues to be squeezed by U.S. retailers on price.

Those struggles were offset by the performance of its beauty business, including its premium skincare brand SK-II, which reported organic sales growth of 5 percent.

"Overall we view the [third quarter] result as disappointing and suggestive the company continues to lose share in the majority of markets/categories, with prestige beauty brand SK-II accounting for the majority of growth," wrote analysts at Stifel.

Net income attributable to the company fell to $2.51 billion, or 95 cents per share, in the third quarter ended March 31, compared with $2.52 billion, or 93 cents per share, a year earlier.

Excluding items, the company earned $1 per share, compared with the 98 cents a share expected by analysts polled by Reuters.

Earlier Thursday, P&G agreed to buy the consumer health business of Merck for about 3.4 billion euros ($4.2 billion).

The announcement is P&G's first major acquisition since activist investor Nelson Peltz joined its board in March. In a vigorous proxy fight between the two, he had argued that the company structure is too complex, innovation too slow and financial planning too conservative.

The deal, which brings with it Seven Seas, broadens a portfolio of health-care brands that includes Vicks, Prilosec OTC and Pepto-Bismol.

It also gives it further exposure to Latin American and Asian Markets, at a time the U.S. retail landscape is increasingly difficult.

"We have large businesses in several difficult markets. The ecosystems in which we operate around the world are being disrupted and transformed," CEO David Taylor said in a statement.

"We will change at an even faster rate — winning through superiority, cost and cash productivity and a strengthened organization and culture."

P&G said it is maintaining its guidance for organic sales growth for 2018, a range of 2 to 3 percent, with expectations that it may fall in the low end of that range.

It narrowed its core earnings per share guidance for 2018, to a range of 6 percent to 8 percent, up from 5 percent to 8 percent.

— Reuters contributed to this report.

Correction: Procter & Gamble's organic sales rose 1 percent. An earlier version misstated the direction.