Ahead Of Procter & Gamble's Q1 Results

(RTTNews) - Consumer goods giant The Procter & Gamble Company (PG) will publish its first-quarter results before the bell this Friday, October 23. Analysts are looking for earnings of $0.95 per share on revenue of $17.17 billion. In the prior year period, the company reported net income of $1.99 billion or $0.69 per share on net sales of $20.8 billion. Core earnings per share was $1.07 last year.

The company has been strengthening business unit strategies and business models and product innovation across all of its brands, but have put particular priority against the four businesses, given their importance to total company results. The four largest businesses, Baby Care, Fabric Care, Hair Care and Grooming represent about 60% of enterprise value sales and profits.

Meanwhile, the company warned that foreign exchange will continue to be a significant sales and earnings headwind, particularly in the first two quarters. To offset the foreign exchange impacts and restore structural economics, the company has taken significant price increases in some markets.

FY16 Outlook

The company expects core earnings per share to be down slightly to up mid-single digits range from a restated $3.77 per share in 2015, on projected organic sales growth of in line to up low single digits range, and net sales decline in the low-to-mid single digit range, including a negative 5 points impact from foreign exchange.

Street is currently looking for full-year 2016 earnings of $3.77 per share on net sales of $68.19 billion. Earlier, analysts expected earnings of $4.18 per share and sales of $75.93 billion.

Moving ahead, the company said its objective is to deliver balanced results across the three main drivers of operating total shareholder return - sales growth, operating profit margin expansion and free cash flow generation. The management expects continued strong cost savings and free cash flow productivity, and is investing behind product innovation to support an improvement in top-line growth.

The company expects to deliver solid operating margin expansion driven by another year of strong productivity-driven savings in cost of goods sold, overhead and non-working marketing and agency costs.

In The Last Quarter...

Procter & Gamble Co. reported a steep decline in profit, hurt by significant one-time Venezuela charge. Stripping down the charge, core earnings per share topped analysts' expectations, while quarterly sales missed their estimates.

Fourth-quarter net earnings attributable to P&G was $521 million or $0.18 per share, sharply lower than $2.58 billion or $0.89 per share in the prior-year quarter.

Net earnings from continuing operations plunged to $0.22 per share from last year's $0.87 per share. Results for the latest quarter include one-time Venezuela charge of $0.71 per share and non-core restructuring costs of $0.07 per share.

Core earnings from continuing operations, which excludes certain items, was $1.00 per share, versus the previous year's $0.93 per share. On a currency-neutral basis, core earnings per share increased 22% to $1.13.

Core earnings per share results encompassed a $0.09 per share benefit compared to the prior year from non-operating income, primarily minor brand divestiture gains.

On average, 20 analysts polled by Thomson Reuters expected earnings of $0.95 per share for the quarter. Analysts' estimates typically exclude certain special items.

Net sales declined 9% to $17.79 billion from $19.60 billion last year, and missed fifteen Wall Street analysts' consensus estimate of $17.98 billion.

Company Snapshot

P&G serves consumers around the world with one of the strongest portfolios of trusted, quality, leadership brands, including Always, Ambi Pur, Ariel, Bounty, Charmin, Crest, Dawn, Downy, Fairy, Febreze, Gain, Gillette, Head & Shoulders, Lenor, Olay, Oral-B, Pampers, Pantene, SK-II, Tide, Vicks, and Whisper. The P&G community includes operations in approximately 70 countries worldwide.