01.27.06
Procter & Gamble Co. (NYSE:PG - News) posted higher-than-expected quarterly profit and sales today, driven by strength in its household and beauty lines and the newly acquired Gillette businesses.
The company also raised its earnings expectations for the year and shares rose to $60.05 in premarket trading on the Inet electronic brokerage. Profit rose 29% to $2.55 billion (72 cents per share) in the fiscal second quarter, from $1.98 billion (72 cents) a year earlier. The results topped the companys expectations of 68 to 69 cents per share.
P&G had nearly 3.55 billion shares outstanding in the most recent quarter, up from a year earlier (2.75 billion). The number of shares was higher due to shares issued as part of the Gillette acquisition. P&G has also repurchased $12 billion worth of shares since the deal was announced.
Revenue jumped 27% to $18.34 billion, topping analysts expectation of $18.22 billion. Unit volume also rose 27%. Excluding acquisitions, divestitures and the impact of foreign exchange, sales rose 8%.
Volume excluding acquisitions and divestitures rose 6%. Every business posted higher volume and sales. The snacks and coffee business posted the smallest volume rise of 3%, due to the impact of Hurricane Katrina on its Louisiana coffee facility. The company notes that Katrina's impact on the coffee business hit earnings by about a penny per share.
P&G now expects to earn $2.58 to $2.62 in the current fiscal year, which ends in June. The company cited strong sales momentum on its P&G and Gillette business for the improved forecast, and said the view includes 19 cents to 23 cents of dilution from the Gillette acquisition. In November, P&G had forecast fiscal year earnings of $2.54 to $2.60 per share.
Analysts expected a profit of $2.59 per share from P&G. For the fiscal third quarter (ending in March), P&G forecast earnings of 58 cents to 61 cents per share, including a hit of 7 cents to 10 cents from the Gillette deal. That view includes investments behind Gillette's newest razor, Fusion. Analysts had been expecting a profit of 60 cents per share.
P&G shares fell 2.6% during the quarter. P&G repurchased $3.5 billion in shares during the quarter. It expects to repurchase about $20 billion in total under the program, which should be completed by mid-year 2006.