Are Proctor & Gamble Earnings Enough for Investors?

In terms of guidance, the company adjusted its expectations for EPS in the 2015 fiscal year to $3.76 from $4.02, compared to the consensus estimate of $3.77. For 2016, P&G expects EPS to be up around mid-single digits compared to the fiscal 2015 outlook.

As for its segments, the company reported:

• Beauty segment organic sales decreased two percent as lower organic volume was partially offset by a positive one percent impact from both pricing and mix.
• Grooming segment organic sales were unchanged as higher pricing on Blades & Razors and growth on Braun from innovation and increased trade support was offset by negative geographic and product mix.
• Health Care segment organic sales decreased one percent as lower volume was partially offset by favorable geographic mix and increased pricing in both Oral Care and Personal Health Care.
• Fabric Care and Home Care segment organic sales were unchanged versus year ago as pricing and mix benefits offset lower volume.
• Baby, Feminine and Family Care segment organic sales declined three percent versus year ago as pricing benefits in Baby Care and Feminine Care along with mix benefits in Baby Care and Family Care were more than offset by lower volume in each of the three businesses.

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A.G. Lafley, chairman, president and CEO of P&G, commented on earnings:

We delivered strong first quarter operating profit margin and free cash flow results. Top-line results were soft, as expected, given significant foreign exchange impacts, our deliberate choices to exit unprofitable businesses and the early stage of the improvement plans we’re implementing in our largest categories and markets. We continue to make strong progress on productivity savings, which will fuel smart investments in top-line growth. We expect second quarter organic sales growth to be positive and to further strengthen in the back half as we invest to build awareness and trial of our consumer-preferred products and brands.

Operating cash flow was $3.5 billion for the quarter and adjusted free cash flow productivity was 101%. On the books, P&G had $7.71 billion in cash and cash equivalents, compared to $6.84 billion in the previous quarter.

Friday morning, shares of P&G traded up 3.4% at $77.41. The consensus analyst price target is $81.29m and the 52-week trading range is $65.02 to $93.89.