P&G posts higher than expected profits but disappoints on revenue
Cincinnati, Ohio-based consumer goods conglomerate The Procter & Gamble Company (P&G) announced second-quarter profits that beat analysts’ expectations on Thursday, but posted revenues that came in under estimates, despite strong growth in health care and beauty.
For the second quarter ended December 31, 2019, P&G reported net sales of $18.2 billion, up 5% from the prior-year period’s revenues of $17.4 billion.
The company’s health care segment saw 14% sales growth in the quarter, while its beauty portfolio, which includes the Olay, Head & Shoulders and Herbal Essences brands, among others, posted a 7% rise.
Growth was slower in the group’s other segments, with fabric and home care seeing a rise of 4% in sales, grooming an increase of 2%, and baby, feminine and family care a rise of 1%.
P&G’s quarterly net income totaled $3.72 billion, or $1.41 a share, up from $3.19 billion, or $1.22 a share, in the same period in the previous year.
FactSet analysts cited by MarketWatch had expected the company to report earnings per share (EPS) of $1.37 on revenues of $18.42 billion.
“We delivered another strong quarter of organic sales growth, core earnings per share and cash returned to shareowners,” stated P&G chairman, president and CEO David Taylor in a release. ““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.”
The company now expects full-year net sales to see growth of between 4% and 5%, up from a previous guidance of between 3% to 5%. Core EPS growth is now predicted be in the range of 8% to 11%, compared to the company’s previously reported outlook of between 5% and 10%.
Shares in P&G fell 2.5% in premarket trading on Thursday following the announcement of the company’s Q2 results.
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