Are Procter & Gamble Earnings Good Enough?

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When Procter & Gamble Co. (NYSE: PG) reported its most recent quarterly results before the markets opened on Tuesday, the company posted $1.06 in earnings per share (EPS) and $16.46 billion in revenue. That compares with consensus estimates of $1.03 in EPS and revenue of $16.34 billion, as well as the $1.00 per share and $16.28 billion in last year’s fiscal third.

Net sales in the latest quarter increased 1% from the prior year. Unfavorable foreign exchange had a 5% impact on sales for the quarter. Excluding the effects of foreign exchange, acquisitions and divestitures, organic sales increased 5%, driven by a 2% increase in organic shipment volume.

In terms of its segments the company reported as follows:

  • Beauty net sales increased 4% year over year to $3.06 billion.
  • Grooming net sales decreased 8% to $1.42 billion.
  • Health Care net sales increased 9% to $2.12 billion.
  • Fabric & Home Care net sales increased 2% to $5.38 billion.
  • Baby, Feminine & Family Care net sales decreased 2% to $4.36 billion.

Looking ahead to the fiscal 2019 full year, P&G expects to see all-in sales growth in the range of in-line to up 1% compared with the previous fiscal year, while core EPS are expected to increase 3% to 8% year over year. Consensus estimates call for $4.45 in EPS and $67.2 billion in revenue for the year.

David Taylor, board chair, president and chief executive, commented:

We delivered another quarter of strong organic sales growth, enabling us to further increase our outlook for the year. Cash generation also remains strong, supporting an increase in our cash productivity target and extending our long track record of dividend increases. Our focus on superiority, productivity and improving P&G’s organization and culture is delivering improved results despite a challenging competitive and macroeconomic environment.

Shares of P&G were last seen down about 2% at $103.93, in a 52-week range of $70.73 to $107.20. The consensus price target is $101.12.


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