Procter & Gamble Co. (PG) experienced a premarket boost on Tuesday, with its stock rising by 1.2%. The consumer goods giant surpassed profit expectations for its fiscal second quarter, primarily due to its decision to raise prices once again.
Impressive Financial Performance
During the quarter ending on December 31, the Cincinnati-based company reported a net income of $3.468 billion, equivalent to $1.40 per share. In comparison, the previous year’s earnings amounted to $3.933 billion, or $1.59 per share. Adjusted per-share earnings stood at an impressive $1.84, surpassing the FactSet consensus of $1.70.
Steady Sales Growth
Despite facing some challenges, Procter & Gamble managed to achieve a 3% increase in sales. The company’s total revenue during the quarter reached $21.441 billion, just slightly below the FactSet consensus of $21.476 billion. These numbers signify steady growth compared to the previous year’s figure of $20.733 billion.
Revised Profit Outlook
Procter & Gamble adjusted its profit guidance for fiscal year 2024 but maintained its sales outlook. Instead of expecting a 6% to 9% increase in earnings per share (EPS), the company now anticipates a decline of 1% to flat EPS. However, it remains confident in achieving an 8% to 9% rise in adjusted EPS.
Positive Future Prospects
Looking ahead to fiscal year 2023, Procter & Gamble projects a sales increase ranging between 2% and 4%. To support this growth, the company plans to undergo market portfolio restructuring, primarily in enterprise markets such as Argentina and Nigeria. Restructuring charges of $1.0 billion to $1.5 billion are expected as a result.
Noncash Impairment Charge
During the second quarter, Procter & Gamble incurred a $1.3 billion pretax noncash impairment charge related to intangible assets acquired from the Gillette Co. back in 2005. This charge had a significant impact on the company’s financial position.
Promising Performance
Despite these challenges, Procter & Gamble’s stock has exhibited a year-to-date growth of 4.8%. In contrast, the S&P 500 has gained 20.7%, highlighting the company’s resilience and positive market perception.
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