Procter & Gamble Earnings: What to Watch
January 19 2017 - 12:29PM
Dow Jones News
By Sharon Terlep
Procter & Gamble Co., the world's largest maker of household
and personal-care products, is scheduled to release earnings for
the quarter ended Dec. 31 before the market opens Friday. Here's
what you need to know:
EARNINGS FORECAST: Analysts polled by Thomson Reuters expect
P&G to report $1.06 a share in "core" earnings, which excludes
items such as restructuring costs, compared with core earnings of
$1.04 a share a year earlier.
SALES FORECAST: Analysts expect net sales of $16.79 billion for
the quarter, a small drop from $16.92 billion a year earlier.
WHAT TO WATCH:
ORGANIC SALES: P&G has shown it is able to cut costs but has
yet to deliver on a promise to meaningfully increase revenue.
Investors will look for P&G to post improved organic-sales
growth, a measure that strips out currency moves, acquisitions and
divestments. Last quarter, the company posted an unexpected jump in
profit and its biggest increase in organic sales -- 3% -- in more
than a year. But the company said not to expect another dramatic
increase right away, and falling short of the cautious forecast
would likely deal a further blow to P&G's stock price, which is
down nearly 3% since the company's last earnings announcement.
BEAUTY BUSINESS: This will be P&G's first quarterly results
since the company unloaded the bulk of its beauty business to Coty
Inc. P&G's beauty brands, including CoverGirl makeup and
Clairol hair dye, were sucking resources while returning little in
the way of profit or growth for the company. The $11.4 billion deal
closed last fall, shrinking P&G by more than 10,000 employees
and 40 brands. Investors will get their first look at how P&G
fares without those ailing brands, and will gain insight into the
performance of the remaining beauty names, such as Olay facial
moisturizers and Pantene shampoo.
CURRENCY: Currency volatility hasn't let up, much to the
detriment of the world's big multinational corporations. P&G
and its rivals for many quarters have felt the effect of the strong
dollar on financial results. In a report earlier this month,
Bernstein analysts said 37 of the 40 currencies the firm regularly
tracks have weakened in value since Oct. 15. Wall Street will look
to what P&G has to say on overseas currency woes, particularly
since about two-thirds of the company's sales are outside the
U.S.
INDUSTRY HEALTH: P&G is the first of among its
consumer-products peers, which include Unilever NV,
Colgate-Palmolive Co. and Kimberly Clark Corp., to announce results
this earnings season. Wall Street will look for an indication of
how the overall industry is expected to fare in 2017 based on
P&G's take on consumer sentiment, pricing of products and other
economic factors. P&G is rarely the first of the major
consumer-products companies to report results but opted to release
its earnings figures a week earlier than usual for the most recent
quarter.
(END) Dow Jones Newswires
January 19, 2017 12:14 ET (17:14 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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