Shares of The Procter & Gamble Co. PG jumped 4.47% to $124.40 in premarket trading on Tuesday after releasing financial results for the first quarter of fiscal 2020, which ended on Sept. 30.
The Cincinnati-based multinational consumer goods company posted GAAP earnings per diluted share of $1.36, beating expectations by 12 cents, on $17.8 billion in revenue, topping projections by almost $380 million.
The earnings result was 11% higher year over year, and the revenue increased 6.7% from the prior-year quarter.
Organic sales were up 7% as a result of higher organic shipment volume and pricing as well as positive mix impact. The key drivers of organic sales in the quarter were the beauty segment, which saw a 10% gain, and the healthcare segment, reporting a 9% expansion.
During the quarter, the company observed a disproportionate growth in several categories of the beauty segment and the health care segment which, together with strong growth reported in Japan, drove the positive mix.
Further, cash flows from operating activities came in at $4.2 billion and the adjusted free cash flow was about 91% of net earnings.
Procter & Gamble used part of its free cash flow to return $1.9 billion cash to shareholders in the form of paid dividends and to withdraw $3 billion in common shares of its own stock.
Looking ahead to full fiscal 2020, Procter & Gamble forecasts all-in sales growing by 3% to 5% to $69.7 billion to $71.06 billion versus analysts’ projections of $69.97 billion. The company expects core earnings per share to grow by 5% to 10% to about $4.75 to $4.97 versus expectations of $4.84.
The balance sheet had $9.3 billion available in cash on hand, $5.47 billion in total inventories and $29.5 billion in total debt as of Sept. 30. The equity was worth nearly $47 billion.
Shares of Procter & Gamble closed at $119.1 on Monday for a market capitalization of $298.01 billion. Year to date, the share price has gained 30% to place above the 120-day simple moving average line. The share price is still slightly below the 70-day line and significantly below the 30-day line.
The 52-week range is $85.23 to $125.36.
The 14-day relative strength indicator is 45, suggesting the stock is neither oversold nor overbought.
Wall Street issued an overweight recommendation rating for shares of The Procter & Gamble with an average target price of $126.10.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- A Trio of Quality Stocks for Your Portfolio
- Halliburton Posts 3rd-Quarter Numbers
- 3 Low Price-Book Stocks Drawing Investors' Interest
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
