Procter & Gamble Earnings Top Estimates

Procter & Gamble Co. (NYSE: PG) reported its fiscal second-quarter financial results before the markets opened on Tuesday. The company had $1.04 in earnings per share (EPS) on $16.90 billion in revenue. That compares to Thomson Reuters consensus estimates of $0.98 in EPS on $16.94 billion in revenue. In the same period of the previous year, the company posted EPS of $0.95 and revenue of $20.16 billion.

Net sales in the quarter decreased by 9%, including the negative eight percentage point impact from foreign exchange and three percentage point impact from the Venezuela deconsolidation and minor brand divestitures.

The company’s guidance for fiscal 2016 calls for all-in sales to be down high-single digits and all-in GAAP EPS are expected to increase in the range of 38% to 46% from the prior year. The consensus estimates call for $3.74 in EPS on $65.84 billion in revenue for the fiscal 2016 year.

In terms of its business segments Procter & Gamble reported:

• Beauty segment organic sales increased 1% as a positive 4% impact from pricing was partially offset by a 3% impact from lower organic volume. Organic sales increases in Personal Care and the super-premium SK-II skin care brand were partially offset by organic sales declines of the Olay brand.
• Grooming segment organic sales increased 3% as higher pricing in shave care and growth on Braun from innovation more than offset lower volume. Organic sales increased globally in shave care and in Braun in developed markets.
• Health Care segment organic sales increased 3% as favorable geographic mix and higher pricing in both Oral Care and Personal Health Care were partially offset by lower volume. Organic sales growth was driven by Oral Care in developed markets, particularly power toothbrushes, and Personal Health Care in developing markets.
• Fabric Care and Home Care segment organic sales increased 2% versus year ago on pricing benefits and favorable mix while organic volume was unchanged. Both Home Care and Fabric Care delivered strong growth in developed markets. This growth was partially offset by a decline in Fabric Care in developing markets.
• Baby, Feminine and Family Care segment organic sales were unchanged versus year ago as pricing benefits were offset by lower organic volume. Baby Care organic sales declined as the growth of Pampers in North America was more than offset by declines in other regions. Feminine Care organic sales increased due to growth in developed markets from innovation and in developing markets due to pricing. Family Care organic sales were unchanged as increases in North America were offset by strategic distribution decreases in Mexico.

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David Taylor, president and chief executive officer, commented on earnings:

We are encouraged by our return to organic sales growth in the quarter. With the top-line improvement and continued cost reduction, we delivered solid core operating income and EPS growth in the face of significant macro-economic and geopolitical headwinds.

Shares of Procter & Gamble closed Monday down 0.7% at $76.85, with a consensus analyst price target of $83.11 and a 52-week trading range of $65.02 to $87.21. Following the release of the earnings report, the stock was up about 1.5% at $78.00 in early trading indications Tuesday.