Consumer packaged goods company the Procter & Gamble Co. (PG, Financial) reported its first-quarter 2018 results before the opening bell on Oct. 20.
The Cincinnati-based company posted adjusted earnings per share of $1.09, which topped estimates of $1.08 and grew 6% from a year ago. Revenue of $16.65 billion was just shy of expectations of $16.69 billion but increased 1% from the prior-year quarter.
Shares fell 1.7% in premarket trading following the announcement.
The trend in P&G’s revenue growth over the past decade is illustrated in the graph below.
Chairman and CEO David Taylor said sales and earnings for the quarter were in line with expectations and are on track to meet targets for the year. The company has been restructuring its business over the past several years.
“We delivered organic sales growth in a decelerating global market and against a relatively strong base period. Market share trends continue to improve, with more of our top brands and countries holding or growing share,” he said.
The company’s organic sales also rose 1%. While P&G recorded higher sales in beauty and home care products, declining sales in its grooming segment offset some of the growth. The Gillette shaving business is facing increasing competition from smaller players like Dollar Shave Club.
In regard to guidance for fiscal 2018, the company maintained its outlook for 2% to 3% organic sales growth and 3% all-in sales growth. EPS are expected to grow 5% to 7% from $3.92 in fiscal 2017. The company noted it is maintaining these forecasts despite over $100 million in incremental commodity cost headwinds caused by the hurricanes earlier this year.
“Looking forward, we will drive innovation, productivity and organization transformation to accelerate top-line growth while further expanding our industry-leading profit margins,” Taylor said.
Last week, the company narrowly defeated activist investor Nelson Peltz’s bid for a seat on the board after a months-long proxy battle. Peltz’s firm, Trian Fund Management, owns a $3.5 billion stake in the company. He plans to contest the vote as he believes it was too close to call.
Among the 26 gurus invested in Procter & Gamble, Donald Yacktman (Trades, Portfolio)’s Yacktman Asset Management has the largest holding with 13.11% of outstanding shares. Diamond Hill Capital (Trades, Portfolio), Jim Simons (Trades, Portfolio), Mairs and Power (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Warren Buffett (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Ray Dalio (Trades, Portfolio) are other top shareholders.
With a market cap of $233.38 billion, Procter & Gamble was trading around $88.59 on Friday. According to GuruFocus data, the stock has gained 9% year to date.
Disclosure: I do not own any stocks mentioned.
