Procter & Gamble shares rise as earnings, sales top Wall Street estimates

Procter & Gamble shares rise as earnings, sales top Wall Street estimates

Procter & Gamble shares rose nearly 3 percent in premarket trading Wednesday after fiscal second-quarter earnings and sales outpaced Wall Street estimates, prompting the company to raise its organic sales forecast.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $1.25, adjusted vs. $1.21 estimated
  • Revenue: $17.44 billion vs. $17.15 billion estimated

“We delivered strong organic sales in the second quarter, building on our first quarter momentum, which enables us to increase our outlook for the year,” said David Taylor, chairman, president and CEO, said in a written statement. “Our focus on superiority, productivity and improving P&G’s organization and culture is delivering improved results despite a challenging competitive and macroeconomic environment.”

P&G reported fiscal second-quarter net income of $3.19 billion, or $1.22 per share, up from $2.5 billion, or 93 cents per share a year earlier.

Excluding restructuring costs and other items, the company earned $1.25 per share, higher than $1.21 per share expected by analysts surveyed by Refinitiv

Net sales rose slightly to $17.44 billion, beating expectations of $17.15 billion. On an organic basis, which excludes the impact of foreign exchange and acquisitions and divestitures, sales were up 4 percent.

P&G raised the high-end of its organic sales growth forecast by 1 percent. The company now expects organic sales to rise in the range of 2 to 4 percent for fiscal 2019. Total sales are expected to be within the range of down 1 percent to up 1 percent.

Foreign exchange and higher commodity and transportation costs are expected to be a $1.4 billion headwind in fiscal 2019.

The company backed its prior earnings forecast, which calls for core earnings per shares to rise 3 to 8 percent from fiscal 2018 core earnings of $4.22 per share.

P&G said it plans to buy back as much as $5 billion in stock this fiscal year.

The company announced in November it is reorganizing its operational structure, a move activist investor Nelson Peltz lobbied for before he joined the company’s board in March. As part of P&G’s new business structure, the company will now have six sector business units organized by industry. Each business will have a unit CEO responsible for running all major decisions, like marketing, costs and supply chain.

In October, it reported its biggest quarterly sales gain in five years, with a number of brands, including its Gillette shaving business and its beauty business, delivering strong performance.

Still, the maker of everyday household goods like Tide laundry detergent, Crest toothpaste and Charmin toilet paper has been squeezed by rising commodity costs, shipping expenses and foreign exchange rates.

P&G, which has a market value of $225.3 billion, has seen its shares drop nearly 2 percent over the past year.

This is a breaking news story. Please check back for updates.

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