P&G Beats Q4 EPS Estimates, Issues Optimistic FY20 view

P&G Beats Q4 EPS Estimates, Issues Optimistic FY20 view
July 31, 2019


Procter & Gamble Co. (NYSE: PG) reported fiscal 2019 fourth-quarter results that surpassed analysts’ estimates. Core earnings per share grew 17% y-o-y, led by robust organic sales growth and an increase in core operating margin. Currency-neutral core earnings per share rose 26% from last year. Excluding charges, organic sales soared 7%, backed by a 3% rise in organic volume. The company also issued an optimistic outlook for fiscal 2020. Following the release of quarterly results, the stock of P&G rose 3.80% or $4.41 to close at $120.41.

Cincinnati, Ohio-based company reported fiscal 2019 fourth-quarter net sales of $17.094 billion, up 4% from $16.503 billion in the similar period last year. The Wall Street analysts had anticipated revenues of $16.86 billion for the fourth quarter.

For the recent quarter, net loss was $5.24 billion, or $2.12 per share, compared with $1.89 billion, or $0.72 per share in the year-ago period. Excluding a one-time, non-cash charge related to Gillette Shave Care, core (non-GAAP) earnings increased to $2.901 billion, or $1.10 per share in the quarter ended June 2019, from $2.453 billion or $0.94 per share in the corresponding quarter of 2018. Analysts had anticipated earnings of $1.05 per share for the quarter.

P&G blamed currency volatility and a decline in sales volume of razors and blades, mainly in developed markets, as the main reason for the non-cash charge. The company highlighted that an increasing number of men opted to have beards or turned to products offered by competitors such as Harry’s or Unilever’s Dollar Shave Club.


  • Beauty unit, which includes premium beauty line SK-II and Olay, reported revenues of $3.190 billion, up 3% on y-o-y basis
  • Grooming division, which includes Braun and the Art of Shaving brands, posted 3% decline in revenues to $1.596 billion.
  • Health Care division, which includes Pepto-Bismol and Crest, recorded 13% y-o-y increase in revenues to $2.038 billion.
  • Fabric & Home Care revenues grew 5% to $5.653 billion in 4Q19.
  • Baby, Feminine & Family Care sales were $4.501 billion, up 1% from last year.

During the quarter, P&G generated operating cash flow of $4.20 billion, with adjusted free cash flow productivity of 122%.

For fiscal 2019, core earnings grew 7% to $4.52 per share. Currency-neutral core earnings rose 15%. Net sales were $67.70 billion, up 1% versus the year-ago period. Excluding charges, organic sales increased 5%, led by a 2% rise in organic volume. Analysts anticipated Procter & Gamble to report a profit of $4.47 per share on revenues of $67.42 billion.

Going forward, for fiscal 2020, P&G anticipates all-in sales growth in the range of between 3% and 4% versus fiscal 2019. P&G also forecasts organic sales growth in the range of between 3% and 4%. Core earnings per share are anticipated to rise 4% to 9% from fiscal 2019. The company also forecasts it will pay shareholders $7.50 billion in dividends and repurchase shares for $6 billion to $8 billion in fiscal 2020.

The robust earnings, decade-high revenue growth, and upbeat FY20 view is anticipated to keep the stock bullish in the short-term.

The price chart indicates that the stock continues to move along an ascending trend line. Furthermore, the MACD indicator is making new highs. As a result, we can expect the stock of P&G to remain bullish in the short-term.

pg - techncial analysis - 31st July 2019

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Sammy is our forex expert, with over 20 years experience in the financial sector, she will be keeping you up to date with the ups and downs of currencies around the world

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