Procter & Gamble Q3 Adj. Profit Tops View; Sees Lower Q4 Core EPS

(RTTNews) - Procter & Gamble Co. (PG) reported Tuesday a profit for the third quarter fiscal year 2016 that grew 28 percent from last year. Quarterly core earnings per share topped analysts' expectations. It expects fourth-quarter core earnings per share to be significantly lower than prior year. It maintained its 2016 outlook for organic sales growth of in-line to up low-single digits versus fiscal 2015.

The Company expects to repurchase and exchange shares at a value of more than $8 billion through a combination of direct share repurchases and shares that were exchanged in the Duracell transaction. In addition, P&G expects to pay dividends of more than $7 billion, for a total of over $15 billion in dividend payments, share repurchases and share exchanges this fiscal year.

Net earnings attributable to the company for the third quarter fiscal year 2016 grew 28 percent to $2.750 billion from $2.153 billion, with earnings per share improving to $0.97, from $0.75 in the prior year, driven by impacts from discontinued operations, primarily from base period impairment charges related to the Batteries business and a current year gain on the sale of the business, which closed on February 29, 2016.

Core earnings per share were $0.86, a decrease of three percent versus the prior year. Excluding the impact of foreign exchange, currency-neutral core earnings per share were unchanged for the quarter. Analysts polled by Thomson Reuters expected the company to report earnings of $0.82 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales were $15.8 billion, a decrease of seven percent versus the prior year including a five percent negative impact from foreign exchange, a two percent impact from the Venezuela deconsolidation and a one percent impact from minor brand divestitures. Organic sales grew one percent. Wall Street analysts had a consensus revenue estimate of $15.81 billion for the quarter.

P&G noted that fourth quarter Core earnings per share is expected to be significantly lower than prior year due to a combination of increased advertising investments, a higher tax rate, headwinds from foreign exchange and lower non-operating income.

P&G said it maintained its 2016 outlook for organic sales growth of in-line to up low-single digits versus fiscal 2015. The Company expects all-in sales to be down high-single digits in fiscal 2016, including a negative six to seven percentage point impact from foreign exchange and a two to three percentage point drag from the combined impacts of the Venezuela deconsolidation and minor brand divestitures. With one quarter remaining in its fiscal year, the company said it tightened its outlook for Core earnings per share to a range of down three percent to six percent versus last year's Core earnings per share of $3.76.

P&G said it continues to expect constant-currency Core earnings per share growth in the mid-single digits. The company continues to expect foreign exchange to have about a nine percentage point, or negative $0.35 per share, impact on Core earnings per share growth for the year. All-in GAAP earnings per share are expected to be up in the range of 46% to 51% versus the prior year.

PG closed Monday's trading at $81.41, up $0.46 or 0.57 percent.