Procter & Gamble Earnings and Acquisition Not Enough for Investors

By Chris Lange Updated Jan 12, 12:46AM EST · Published Apr 19, 10:45AM EDT

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Procter & Gamble Earnings and Acquisition Not Enough for Investors — © courtesy of Procter & Gamble Co.

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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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.