Procter & Gamble beats, raises guidance


Procter & Gamble was rallying, up 4.31% to $US94.34, early Wednesday after the company posted stellar earnings for the second quarter and raised its full-year guidance.

The consumer-goods seller earned $US1.25 a share, $US0.04 higher than what analysts surveyed by Bloomberg were expecting. It generated revenue of $US17.44 billion, outpacing the Wall Street consensus of $US17.16 billion. Procter & Gamble said its organic sales increased 4%, topping the 2.6% growth that was expected.

“We delivered strong organic sales in the second quarter, building on our first quarter momentum, which enables us to increase our outlook for the year,” said CEO David Taylor in a press release.

“Our focus on superiority, productivity and improving P&G’s organisation and culture is delivering improved results despite a challenging competitive and macroeconomic environment.”

Looking ahead, the company lifted the high end of its 2019 guidance for organic sales growth by 1%. It now sees full-year organic growth in the range of 2%-4%. Procter & Gamble also boosted its forecast for all-in sales growth to -1% to +1% year-over-year, up from its previous estimate of -2% to flat. The all-in sales guidance includes a 3%-4% headwind from foreign exchange.

P&G maintained its guidance for earnings-per-share growth of 3-8% YoY from last year’s $US4.22, implying EPS of $US4.35-$US4.55. Wall Street analysts are expecting $US4.40.

“P&G continued its momentum with another organic sales beat, which drove the EPS beat, and more optimistic organic sales outlook for FY19,” said Jefferies analyst Kevin Grundy in a note out on Wednesday.

“Organic sales is focus, but composition was mixed (revs beat, GM % miss, ~4 cents of help from below line items). EPS guide +3-8% maintained as FX/commod. now $US0.03 worse. Positive read-through for HPC group – P&G’s shares should trade-up.”

Grundy has a “hold” rating and $US94 price target – near where shares are trading early Wednesday.

Procter & Gamble was up 5% last year.

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