Proctor & Gamble sinks after a quarterly revenue miss overshadows improved guidance
- Proctor & Gamble announced on Thursday a second-quarter organic revenue miss that upstaged an otherwise rosy report.
- The company's organic sales, which exclude deals and currency changes, grew 5% from the year-ago period, falling below analysts' 5.6% growth estimate.
- P&G's quarterly earnings landed above estimates, and the company lifted its expectations for fiscal-year revenue and profits.
- The company's stock traded as much as 3.5% lower early Thursday.
- Watch P&G trade live here.
Proctor & Gamble on Thursday announced a fiscal second-quarter organic revenue miss that drowned out an otherwise upbeat report.
The company reported $18.24 billion in quarterly sales, falling below the $18.37 billion consensus estimate. Organic sales, which excludes foreign exchange impacts and deals, grew 5% from the year-ago period, but still missed expectations.
The sales miss took center stage among traders, who largely ignored P&G's upgraded forecast for the fiscal year. The consumer goods giant also beat estimates for core earnings, but the positive news wasn't enough to woo investors.
P&G shares sank as much as 3.5% in early Thursday trading.
Here are the key numbers:
Revenue: $18.24 billion, versus the $18.37 billion estimate
Core earnings per share: $1.42, versus the $1.37 estimate
Organic revenue growth: +5%, versus the +5.6% estimate
Full-year core EPS growth forecast: +4% to +5%, previously saw +3% to +5%
The company also announced it will pay more than $7.5 billion in dividends and repurchase between $7 billion and $8 billion in shares through the fiscal year.
"Our strong first half results enable us to further increase our outlook for the full fiscal year across each of these metrics and to increase our commitment of cash return to shareowners," chairman and CEO David Taylor said in the report.
P&G's beauty sector outperformed its other businesses, posting an 8% organic sales jump through the quarter. Its grooming business performed slightly better than anticipated, boasting organic sales growth of 4%.
The company's baby, feminine, and family care business posted the weakest performance through the quarter, with organic sales rising 1%.
P&G's product portfolio includes Tide, Gillette, Olay, Febreze, and Crest.
Dow Jones Industrial Average futures fell more than 30 points following the revenue miss. P&G is the 18th highest-weighted stock in the index.
P&G closed at $126.31 per share on Wednesday, up roughly 1.5% year-to-date.
The company has 12 "buy" ratings, 11 "hold" ratings, and three "sell" ratings from analysts, with a consensus price target of $126.61, according to Bloomberg data.
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