Procter & Gamble Beats Earnings Expectations, but Posts Revenue Miss

Procter & Gamble Co. (NYSE:PG) launched its third-quarter earnings earlier than the market opened on April 17.

Whereas the patron items producer edged previous earnings expectations, income lagged. The corporate cited a stronger greenback as the rationale for the blended outcomes. Gross sales had been pushed greater as shoppers purchased massive portions of home items equivalent to bathroom paper, diapers and paper towels on account of the coronavirus outbreak.

By the numbers

The buyer merchandise large recorded adjusted earnings of $1.17 per share, which mirrored development of 10.4% from the identical interval final 12 months. Income of $17.2 billion rose 4.5% on a year-over-year foundation. Analysts had predicted earnings of $1.11 per share on $17.Four billion in income.

Natural gross sales, barring the impression of international change, acquisitions and divestitures, climbed 6% courtesy of sturdy development within the well being care and sweetness segments.

In a press release, CEO David Taylor mentioned:

“The sturdy outcomes we delivered this quarter are a direct reflection of the integral position our merchandise play in assembly the day by day well being, hygiene and cleansing wants of shoppers world wide. Our group has been doing a terrific job in opposition to our near-term priorities – defending the well being and security of one another, maximizing availability of P&G merchandise to satisfy heightened shopper want and serving to society meet and overcome the challenges of this disaster.”

Efficiency of enterprise divisions

The wonder phase skilled 1% gross sales development within the quarter, pushed by sturdy demand for its pores and skin and private care merchandise in addition to greater costs. Demand for its super-premium SK-II model, nevertheless, noticed double-digit declines.

The grooming enterprise skilled a drop of 4% in natural gross sales. Whereas natural gross sales of its home equipment rose by excessive single digits as in comparison with the prior-year quarter, shave care natural gross sales witnessed a low single-digit lower.

The well being care phase recorded natural gross sales development of 9% 12 months over 12 months, owing to product innovation and elevated pricing, which improved outcomes notably in oral care and private well being care.

The corporate’s child care division witnessed natural gross sales development of seven%, although demand fell in China, which is one in all P&G’s largest markets.

Dividend cost

Whereas most corporations are chopping or suspending dividend amid the Covid-19 pandemic, Procter & Gamble has raised its quarterly dividend by 6% to 79.07 cents per share. This additionally marked the 130th successive 12 months of paying dividends.


For fiscal 2020, Procter & Gamble is projecting gross sales development of three% to 4%, which is down from its prior steering of 4% to five%. The corporate cited headwinds from international foreign money as the rationale for trimming its income forecast. It additionally forecasts that earnings will rise by 235% to 245% on a per-share foundation.

The corporate mentioned it can repurchase $7 billion to $eight billion price of inventory in fiscal 2020.

Disclosure: I don’t maintain any positions within the shares talked about.

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