Procter & Gamble Expected to Report $18.42 Billion in Revenue for 4Q -- Earnings Preview
January 22 2020 - 9:33AM
Dow Jones News
By Micah Maidenberg
Procter & Gamble Co. (PG) is scheduled to report its fiscal
second-quarter results before the market opens Thursday. Here is
what you need to know:
EARNINGS FORECAST: P&G is expected to report a profit of
$1.39 a share, or $1.37 a share following adjustments, per the
consensus estimate from FactSet.
REVENUE FORECAST: Analysts believe the Cincinnati-based
consumer-products giant will generate $18.42 billion in
revenue.
OUTLOOK: In October, Procter & Gamble raised the upper end
of its organic-sales forecast for its 2020 fiscal year, predicting
growth of 3% to 5%, compared with the previous outlook of 3% to 4%.
The company also said then that adjusted profits per share would
rise 5% to 10% for the year, up from an increase of 4% to 9%.
The company is scheduled to hold an investor call covering the
quarter starting at 8:30 a.m. ET Thursday.
SALES GROWTH: The maker of Tide laundry detergent, Pampers
diapers and other staples delivered organic-sales growth of 7% for
its quarter that ended Sept. 30, a performance that outpaced gains
on that metric at other consumer-product companies. The question is
whether P&G can maintain such a pace. The company, which sells
its brands to mass merchants, pharmacy chains, club stores,
groceries and other retailers, may have a bit of tailwind from
consumer spending, which in December rose at a seasonally adjusted
rate of 0.3% from the month earlier, according to the Commerce
Department.
HIGH EXPECTATIONS: P&G's stronger quarterly results have
bolstered its stock, with shares rising 39.4% over the last year, a
stronger performance that the 24.3% gain from the S&P 500 (SPX)
over that time, per FactSet. In a recent survey of 26 institutional
investors conducted by Bernstein analysts, 70% of respondents said
their initial responses to P&G as an investment were positive.
That is a reversal from 2015, when 69% of respondents offered
negative initial views about the company's potential. One challenge
for Procter & Gamble is keeping up with these heightened
expectations.
CLOSE SHAVE: Investors may also be looking for updates about the
company's Gillette shaving business. Last summer, P&G recorded
an $8 billion charge as it wrote down the value of that unit, which
has faced intense competition from rivals that have focused on
offering lower prices. But organic sales in the segment that
includes Gillette, as well as the Braun and Venus shaving brands,
rose 1% the previous quarter.
Write to Micah Maidenberg at micah.maidenberg@wsj.com
(END) Dow Jones Newswires
January 22, 2020 09:18 ET (14:18 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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