Procter & Gamble publishes a stronger than expected earnings report

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Jul 30, 2020
  • Procter & Gamble publishes a stronger than expected earnings report.
  • Mr Clean products and Tide laundry detergent saw higher demand in Q4.
  • P&G's performance was particularly hawkish in North America and China.

Procter & Gamble (NYSE: PG) released its quarterly financial results on Thursday that came in stronger than what the experts had forecast. The company attributed the success to the Coronavirus pandemic that fuelled demand for its Mr Clean products and Tide laundry detergent. P&G also topped the earnings estimates in Q3.

The consumer goods company also highlighted on Thursday that it expects demand to remain upbeat in fiscal 2021 even after the virus subsides. Dunkin Brands also published its quarterly earnings report on Thursday.  

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Shares of the company opened more than 1% up on Thursday. At £100 per share, Procter & Gamble is currently 5% up year to date in the stock market after recovering from an even lower £74.90 per share in March.

Procter & Gamble’s Q4 financial results versus analysts’ estimates

According to Refinitiv, analysts had anticipated the company to print £13.01 billion in revenue in the fiscal fourth quarter. Their estimate for earnings per share (EPS) was capped at 77 pence. In its report on Thursday, Procter & Gamble topped both estimates posting a higher £13.57 billion in revenue and 89 pence of adjusted earnings per share in Q4.

At £2.15 billion, the American multinational said that its net income in the fourth quarter came in significantly stronger than £3.99 billion of net loss in the same quarter last year. On a year over year basis, its net sales were also reported 4% lower.

The Cincinnati-based company saw particularly hawkish performance in North American and China. The company registered a 14% growth in organic sales from its fabric and home care business.

Other prominent figures in Procter & Gamble’s Earnings Report

Other prominent figures included in P&G’s earnings report on Thursday include a 5% increase in organic sales that it generated from its baby, feminine, and family care products. The beauty segment, it added, registered a 3% growth in organic sales in the recent quarter. Lastly, P&G’s healthcare business also noted a 2% improvement in organic sales in Q4.

Procter & Gamble’s grooming business failed to post a growth in organic sales once again. For fiscal 2021, the company forecasts a 1% to a 3% growth in overall sales, a 2% to a 4% growth in organic revenue, and a 6% to a 10% growth in earnings. It expects to buy back up to £6.13 billion worth of shares in fiscal 2021 and payout £6.13 billion in dividends.

At the time of writing, P&G is valued at £246.88 billion and has a price to earnings ratio of 68.99.

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