Procter and Gamble (PG, Financial) released its second-quarter 2019 earnings on Jan. 23 before the market opened.
All of the company’s business divisions performed exceedingly well during the quarter, thereby contributing to the gains.
Key metrics
For the second quarter, the consumer products giant posted earnings of $1.22 per share, up 2.5% from the prior-year quarter. Revenue of $17.44 billion beat Wall Street's forecasts of $17.15 billion. The company’s organic sales, barring the impact of foreign exchange, acquisitions and divestitures, inched up 4% year over year.
In a statement, Chairman, President and CEO David Taylor commented on the company's performance.
"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," he said."Our focus on superiority, productivity and improving P&G's organization and culture is delivering improved results despite a challenging competitive and macroeconomic environment."
Performance of P&G’s business divisions
The beauty sector won the quarter with 8% organic sales growth, driven by robust demand for its super-premium SK-II brand and its Olay skin care products as well as higher prices.Â
The grooming division registered a 3% organic sales decline. The company’s Gillette brand and shave care business underperformed. While the company has reduced prices and revamped product lines for its razors, it acknowledged these turnaround efforts will take some time to show positive results.
The company’s health care business witnessed organic sales growth of 5% as product innovation improved results, particularly in oral care and personal health care.
Forecast
Procter & Gamble expects organic sales to grow between 2% and 4% in 2019. Sales are expected to be in the range of down 1% to up 1%. It also projects core earnings per share growth of 3% to 8%.
Foreign exchange and higher commodity and transportation costs are anticipated to be a combined $1.4 billion headwind in fiscal 2019.
Procter & Gamble said it would repurchase $5 billion worth of shares this year.
Last word
As part of it’s reorganizational efforts, which were announced last November, the company will now have six sector business units, each of which will headed by a CEO who will be responsible for all major decisions.
Disclosure: I do not hold any positions in the stock mentioned.
Read more here:
