Procter & Gamble Earnings and Acquisition Not Enough for Investors
Procter & Gamble made a couple big announcements on Thursday that were met by investor remorse.
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Procter & Gamble Co. (NYSE: PG) made a couple big announcements on Thursday. First the firm released its fiscal third-quarter financial results, and then it announced an acquisition. Ultimately, these big moves by the Dow Jones industrial average component were met by investor remorse.
As for the third-quarter report, P&G said it had $1.00 in earnings per share (EPS) on $16.26 in revenue. Consensus estimates had called for $1.00 in EPS and revenue of $16.22 billion. The same period of last year reportedly had EPS of $0.96 on $15.61 billion in revenue.
The firm reported its segments as follows:
- Beauty segment organic sales increased 5%.
- Grooming segment organic sales decreased 3%.
- Health Care segment organic sales increased 1%.
- Fabric and Home Care segment organic sales increased 3%.
- Baby, Feminine and Family Care segment organic sales decreased 3%.
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Looking ahead to the 2018 full year, the company expects organic sales growth to be in the range of 2% to 3% and that EPS will grow between 5% and 8%. The consensus estimates call for $4.19 in EPS on $66.92 billion in revenue for the year.
At the same time, P&G is acquiring the Consumer Health business of Merck KGaA, Darmstadt, Germany, for a purchase price of approximately €3.4 billion.
This acquisition enables P&G to expand its successful consumer health care business by adding a portfolio of differentiated, physician-supported brands across a broad geographic footprint. It also provides P&G with strong health care commercial and supply capabilities, deep technical mastery and proven consumer health care leadership that will complement P&G’s existing consumer Health Care capabilities and brands such as Vicks, Metamucil, Pepto-Bismol, Crest and Oral-B.
Shares of P&G were down 3% at $75.03 Thursday morning, with a consensus analyst price target of $91.40 and a 52-week range of $74.20 to $94.67.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
