Procter & Gamble Q4 Adj. Profit Tops Estimate

(RTTNews) - Procter & Gamble Co. (PG) reported a profit for the fourth-quarter that surged from the prior year, which included a Venezuelan deconsolidation charge of $0.71 per share. Quarterly net sales were down three percent versus the prior year period hurt by a negative three percentage point impact from foreign exchange and a negative two percent combined impact from Venezuela deconsolidation and minor brand divestitures. Adjusted earnings per share for the quarter beats analysts' expectations.

"Looking forward, we're committed to continued productivity improvement and cost savings that provide the fuel for innovation and investments needed to accelerate and sustain faster top-line growth. We expect fiscal 2017 to mark another significant step toward our goal of balanced growth and value creation and total shareholder return in the top third of our competitive peer group," said Chairman, President and Chief Executive Officer David Taylor.

P&G projects organic sales growth of about 2% for fiscal 2017. The Company expects the combined headwinds of foreign exchange and minor brand divestitures to reduce sales growth by about one percentage point. As a result, P&G estimates all-in sales growth of about 1% for fiscal 2017.

The company said it expects core earnings per share growth of mid-single digits versus fiscal 2016 core EPS of $3.67. P&G noted that core EPS growth in the first quarter of fiscal 2017 will be disproportionately affected by foreign exchange headwinds, which do not fully annualize until later in the year, and the impact of lost finished product sales to its Venezuelan subsidiaries.

All-in GAAP earnings per share are expected to increase 45% to 55% versus fiscal year 2016 GAAP earnings per share of $3.69. The fiscal 2017 GAAP EPS estimate includes approximately $0.10 per share of non-core restructuring costs and a substantial gain from the divestiture of 41 beauty brands to Coty Inc. The exact earnings gain from the transaction with Coty will not be known until the completion of the deal, which is targeted for October 2016.

Net earnings attributable to the company for the fourth-quarter surged to $1.951 billion from the prior year's $521 million. Net earnings per share were $0.69, an increase of 283% versus the prior year period that included a Venezuelan deconsolidation charge of $0.71 per share.

Core earnings per share were $0.79, a decrease of 15% from the prior year. Core earnings per share results declined due to increased marketing investments, lower gains from minor brand divestitures, and a higher core effective tax rate versus the comparison period. Excluding the impact of foreign exchange, currency-neutral core earnings per share decreased eight percent. Analysts polled by Thomson Reuters expected the company to report earnings of $0.74 per share for the fourth-quarter. Analysts' estimates typically exclude special items.

Quarterly net sales were $16.1 billion, a decrease of three percent versus the prior year period hurt by a negative three percentage point impact from foreign exchange and a negative two percent combined impact from Venezuela deconsolidation and minor brand divestitures. Organic sales increased two percent for the quarter driven by a two percent increase in organic shipment volume. Wall Street expected revenues of $15.83 billion for the quarter.