P&G’s Profit and Revenue Beat the Street, but Stronger Dollar Hurts Forecast

procter-gamble-pg-logoConsumer products maker Procter & Gamble Co (NYSE:PG) on Tuesday posted better-than-expected fiscal fourth quarter earnings results, but its full-year outlook fell short of expectations, hurt largely by foreign exchange effects.

The Cincinnati-based company posted fourth quarter net income of $0.79 per share, beating Wall Street’s view of $0.74. revenue fell 2.7% from last year to $16.10 billion, but also beat estimates for $15.83 billion.

Looking ahead, P&G forecast full-year EPS of $3.67, which would badly miss Wall Street’s estimate of $3.97. P&G noted that the “Combined headwinds of foreign exchange and minor brand divestitures [will] reduce sales growth by about one percentage point. As a result, P&G estimates all-in sales growth of about 1% for fiscal 2017.”

The company also issued a warning for the first quarter of 2017: “Core EPS growth in the first quarter of fiscal 2017 will be disproportionately affected by foreign exchange headwinds, which do not fully annualize until later in the year, and the impact of lost finished product sales to its Venezuelan subsidiaries.”

Full fiscal year highlights included:

Operating cash flow was $15.4 billion for the year. Adjusted free cash flow productivity was 115%. The Company reduced common stock outstanding at a value more than $8 billion through the combination of direct share repurchases and shares that were exchanged in the Duracell transaction. The Company also returned $7.4 billion of cash to shareholders as dividends. P&G announced an increase to the quarterly dividend in April, making this the 60th consecutive year of dividend increases. – See more at: http://news.pg.com/press-release/pg-corporate-announcements/pg-announces-fourth-quarter-and-fiscal-year-2016-results#sthash.ORyIKFyO.dpuf

Procter & Gamble shares rose $0.54 (+0.62%) to $86.95 in premarket trading Tuesday. PG has gained 8.82% year-to-date, compared with a 6.41% uptick in the benchmark S&P 500.


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