Procter & Gamble Q2 Profit Surges, Results Beat Estimates

(RTTNews) - Consumer goods giant Procter & Gamble Co. (PG) on Friday reported a profit for the second quarter that more than doubled from last year on a one-time gain and higher margins, while sales edged lower. Both revenue and core earnings per share for the quarter beat analysts' estimates.

In addition, the Cincinnati, Ohio-based maker of Tide detergent, Crest toothpaste and Gillette shaving razors affirmed its outlook for fiscal 2017 core earnings and raised its outlook for organic sales growth.

For the second quarter, net earnings attributable to P&G rose to $7.88 billion or $2.88 per share from $3.21 billion or $1.12 per share in the prior-year period. Earnings per share for the latest quarter includes a gain of $1.95 per share from the Beauty Brands divestiture to Coty.

Core earnings per share were $1.08, compared to $1.04 per share last year. Currency-neutral core earnings increased 9 percent from the prior year period. On average, analysts polled by Thomson Reuters expected the company to earn $1.06 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter edged down to $16.86 billion from $16.92 billion in the prior year. Analysts had a consensus revenue estimate of $16.77 billion.

Sales for the quarter include a negative two percentage impact from foreign exchange. Organic sales increased 2 percent, driven by a two percent increase in organic shipment volume.

Organic sales and organic volume increased in all five business segments. All-in volume increased one percent including the impacts of minor brand divestitures and lost sales to Venezuelan subsidiaries.

Gross margin expanded 80 basis points to 50.8 percent, while operating margin increased 20 basis points to 23.0 percent.

Looking ahead to fiscal 2017, P&G affirmed its outlook for core earnings per share growth of mid-single digits versus fiscal 2016 core earnings per share of $3.67. However, the company raised its outlook for organic sales growth to a range of 2 to 3 percent from the prior outlook of about 2 percent.

P&G now expects the combined headwinds of foreign exchange and minor brand divestitures to reduce sales growth for the year by about 2 to 3 percentage points, from the prior forecast of about 1 percentage point.

As a result, the company now estimates all-in sales growth for fiscal 2017 to be in line with the prior year, compared to its prior outlook for growth of about one percent.

Analysts expect the company to report earnings of $3.84 per share for the year on revenues of $65.15 billion.