Procter & Gamble Q2 Results Beats View; Lifts FY18 Core Earnings Growth Outlook

(RTTNews) - Consumer goods giant Procter & Gamble Co. (PG) on Tuesday reported a 68 percent fall in profit for the second quarter from last year as an increase in sales was more than offset by a tax charge related to the U.S. tax reform in the latest quarter, while the year-ago quarter's results included a divestiture gain.

However, both revenue and core earnings per share for the quarter beat analysts' estimates. Looking ahead, the company raised the upper-end of its fiscal 2018 guidance range for core earnings per share growth to reflect the potential benefit from the Tax Act.

For the second quarter, net earnings attributable to P&G fell to $2.50 billion or $0.93 per share from $7.88 billion or $2.88 per share in the prior-year period.

The latest quarter's results include a tax charge related to the recently enacted U.S. Tax Cuts and Jobs Act, while the year-ago quarter's results includes a gain from the Beauty Brands divestiture to Coty.

Core earnings per share were $1.19, compared to $1.08 per share last year. On average, twenty analysts polled by Thomson Reuters expected the company to earn $1.14 per share. Analysts' estimates typically exclude special items.

Net sales for the quarter rose 3 percent to $17.40 billion from $16.86 billion in the prior year. Analysts had a consensus revenue estimate of $17.39 billion.

Sales for the quarter include a positive one percentage impact from foreign exchange. Organic sales and volume both increased 2 percent.

Looking ahead to fiscal 2018, P&G maintained its guidance for organic sales growth in a range of 2 to 3 percent for fiscal 2018. The company continues to estimate all-in sales growth of about 3 percent for fiscal 2018.

However, the company raised its outlook for full-year core earnings per share growth to a range of 5 to 8 percent from the previous growth range of 5 to 7 percent versus fiscal 2017 core earnings per share of $3.92.

All-in reported earnings per share are now expected to decrease 30 percent to 32 percent, compared to the prior outlook for a decrease of 26 percent to 28 percent versus fiscal year 2017 reported earnings per share of $5.59.

The Street expects earnings of $4.18 per share for the year on revenues of $67.05 billion.