Shares of Procter & Gamble Co. (PG, Financial) moved up 3.97% to $120.60 in premarket trading on Tuesday after the Cincinnati-based multinational consumer goods corporation released financial results for the final quarter and full year of fiscal 2019.
Fourth-quarter non-GAAP earnings per share of $1.10 was a 17% increase from the prior-year quarter and beat expectations by 5 cents. Strong growth in organic sales and improvement of core operating margin drove non-GAAP earnings during the quarter.
The GAAP result was a loss of $2.12 per diluted share or a negative turnaround from a year ago GAAP net profit of 72 cents per diluted share. It missed consensus estimates by $3.17. The GAAP result was influenced by non-recurring adjustments to lower the carrying values of the Gillette Shave Care business.
Revenue grew 3.6% year-over-year to $17.1 billion and beat projections by $240 million.
Thanks to the increase in shipment volume and higher pricing, organic sales went up 7% in the quarter. Strong growth reported in developed markets and positive mix impact also underpinned organic sales growth.
By segment, organic sales changed as follows: Beauty increased 8%, grooming jumped 4%, health care grew 10%, and fabric and home care rose 10%. Baby, feminine and family care went up 5%.
Procter & Gamble also reported financial results for the entire 2019 fiscal year. The most relevant changes were a 1% increase in revenue to $67.7 billion and a 5% jump in organic sales.
Higher net sales and lower effective tax rates drove the 15% increase in currency-neutral core earnings to $4.52 per share. Non-recurring charges to lower the carrying value of Gillette Shave Care pushed diluted net earnings per share down 61% to $1.43.
Looking ahead to full fiscal 2020, Procter & Gamble Co. anticipates all-in sales growth of 3-4% versus consensus’ estimates of $69.76 billion. The company expects core earnings per share of $4.70 to $4.93 versus expectations of $4.75.
Shares of Procter & Gamble Co. closed at $116 on Monday for a market capitalization of $290.97 billion. Year to date, the share price increased 26%. The closing price on Monday was 48% off the 52-week low of $78.49 and only 0.5% below the 52-week high of $116.52.
The 14-day Relative Strength Indicator is 63, suggesting the stock is neither oversold nor overbought.
Wall Street issued an overweight recommendation rating for shares of The Procter & Gamble Company with an average target price of $111.62.
Disclosure: I have no positions in any securities mentioned.
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