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Procter & Gamble beats by $0.06, reports revs in-line; guides FY16 EPS below consensus
- Reports Q2 (Dec) earnings of $1.04 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus of $0.98; revenues fell 8.5% year/year to $16.91 bln vs the $16.94 bln Capital IQ Consensus, including a negative eight percentage point impact from FX and three percentage point impact from the Venezuela deconsolidation and minor brand divestitures.
- Organic sales increased two percent as a three percent pricing benefit more than offset a two percent reduction in organic shipment volume. Organic sales were in-line or higher in all five reporting segments. All-in and organic volume declined three percent and two percent, respectively. Pricing increased net sales in all five business segments and increased total net sales by three percent.
- Co issues downside guidance for FY16, sees EPS of down 3-8% to ~$3.46-3.65, excluding non-recurring items, vs. $3.75 Capital IQ Consensus. P&G now expects foreign exchange will have a 10%, or a negative $0.37 per share, impact on Core EPS growth for the year. This is seven percentage points, or $0.26 per share, greater than the impact the Company expected at the beginning of the fiscal year. P&G said it is maintaining its guidance for constant currency Core EPS growth of mid-to-high single digits, with its current outlook at the low end of this range.
- P&G said it is maintaining its outlook for organic sales growth of in-line to up low-single digits versus fiscal 2015. The Company expects all-in sales to be down high-single digits in fiscal 2016, now including a negative seven percentage point foreign exchange impact and a two to three percentage point drag from the combined impacts of the Venezuela deconsolidation and minor brand divestitures. P&G increased its outlook for Adjusted Free Cash Flow Productivity from 90% to 100% of adjusted net earnings for the fiscal year. The Company continues to expect to retire shares at a value of ~$8 to $9 billion dollars through a combination of direct share repurchases and shares that will be exchanged in the Duracell transaction.