Procter & Gamble Beats on Profit Expectations
Procter & Gamble (PG) reported better-than-expected second quarter profit, helped by cost cutting measures, but said a stronger dollar would take a bigger chunk out of full-year sales.
P&G has been shrinking its portfolio to focus on core, high-growth brands such as Gillette shaving products, Pampers diapers, and Tide detergent.
Cost of selling goods fell 11.5% to $8.46 billion, while selling, general and administrative costs fell 14.1% to $4.60 billion in the quarter.
P&G said it now expected foreign exchange to have a 7 percentage point impact on 2016 sales. It had earlier anticipated an impact of 5-6 percentage points.
Net earnings attributable to the company rose to $3.21 billion, or $1.12 per share, in the second quarter ended Dec. 31, from $2.37 billion, or 82 cents per share, a year earlier.
Excluding items, the company earned $1.04 per share, beating the average analyst estimate of 98 cents, according to Thomson Reuters I/B/E/S.
Sales fell 8.5% to $16.92 billion, slightly below the average analyst estimate of $16.94 billion.
Organic sales that strips out the impact of currency, divestitures, and acquisitions, grew 2% in the quarter, helped by higher prices.
P&G said it would spend $15 billion to $16 billion in dividend payments, share exchanges, and share repurchases this fiscal year, including dividends of more than $7 billion.