Procter & Gamble beats by $0.05, reports revs in-line; raises high end of FY18 EPS due to tax, reaffirms sales guidance
- Reports Q2 (Dec) earnings of $1.19 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus of $1.14; revenues rose 3.2% year/year to $17.39 bln vs the $17.39 bln Capital IQ Consensus. Organic sales and volume both increased two percent. A one percent positive mix impact from the disproportionate growth of higher priced categories, Skin & Personal Care and Personal Health Care, was offset by a negative pricing impact of one percent. Beauty organic sales +9%, grooming -3%, Health Care +4%, Fabric/home +3%, Baby, feminine, family -1%; 10% adj. EPS growth driven primarily by increased net sales and a lower core effective tax rate. Impacts from the Tax Act and foreign exchange each contributed ~ four percentage points to core earnings per share growth, and higher commodity costs reduced core earnings per share growth by ~four percentage points. Core SG&A as a percentage of sales decreased 40 basis points, as 40 basis points of savings in overhead, agency fees and advertising production costs and 40 basis points of sales growth leverage were partially offset by reinvestments in research & development and information technology. Media spending was in-line with prior year levels. Core operating profit margin decreased 10 basis points including ~ 20 basis points of favorable foreign exchange.
- Co issues in-line guidance for FY18, sees EPS +5-8% (from +5-7%) to ~$4.12-4.23, excluding non-recurring items, vs. $4.17 Capital IQ Consensus; reaffirms FY18 revs +3% to $67.0 bln vs. $67.12 bln Capital IQ Consensus. P&G said it is maintaining its guidance for organic sales growth in the range of two to three percent for fiscal 2018.