Is This the Turnaround Procter & Gamble Has Waited For?

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Procter & Gamble Co. (NYSE: PG) released its fiscal first-quarter financial results before the markets opened on Friday. The company said that it had $1.12 in earnings per share (EPS) and $16.69 billion in revenue, compared with Thomson Reuters consensus estimates of $1.09 in EPS and $16.46 billion in revenue. In the same period of last year, P&G said it had EPS of $1.09 on $16.65 billion in revenue.

Excluding the impacts of foreign exchange, acquisitions and divestitures, organic sales increased 4% in the most recent quarter. At the same time, operating cash flow was $3.6 billion and adjusted free cash flow productivity was 95%.

In terms of its segments, the company reported as follows:

  • Beauty net sales increased 5% year over year to $3.29 billion.
  • Grooming net sales decreased 1% to $1.56 billion.
  • Health Care net sales decreased 3% to $1.85 billion.
  • Fabric & Home Care net sales increased 2% to $5.49 billion.
  • Baby, Feminine & Family Care net sales decreased 3% to $4.39 billion.
  • Corporate net sales increased 7% to $116 million.

Looking ahead to the fiscal full year, the company expects to see EPS of $4.22, with organic sales growth of 2% to 3%. Consensus estimates from Thomson Reuters call for $4.37 in EPS and $66.5 billion in revenue for the year.

During the latest quarter, the company returned $3.1 billion of cash to shareholders via $1.9 billion of dividend payments and nearly $1.3 billion of common stock repurchases.

David Taylor, board chair, president and CEO, commented:

We generated strong consumption, organic volume and organic sales in the first quarter. This keeps us on track to deliver our top- and bottom-line targets for the fiscal year. Our focus on superiority, productivity and improving P&G’s organization and culture is driving improved results.

Shares of Procter & Gamble closed Thursday at $80.24, in a 52-week range of $70.73 to $93.14 and with a consensus analyst price target of $83.83. Following the announcement, the stock was up nearly 5% at $84.05 in early trading indications Friday.