Post Earnings Coverage as P&G's Q3 Core Earnings Rose 12% Y-o-Y
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Upcoming AWS Coverage on Herbalife Post-Earnings Results
LONDON, UK / ACCESSWIRE / May 1, 2017 / Active Wall St. announces its post-earnings coverage on The Procter & Gamble Co. (NYSE: PG). The Company reported its financial results for the third quarter fiscal 2017 (Q3 FY17) on April 26, 2017. The Cincinnati, Ohio-based Company's core earnings per share increased 12% y-o-y beating market consensus estimates. Register with us now for your free membership at:
One of The Procter & Gamble's competitors within the Personal Products space, Herbalife Ltd. (NYSE: HLF), announced on April 04, 2017, that it will release its Q1 2017 financial results after the close of trading on the NYSE on Thursday, May 04, 2017. The same day, at 5:30 p.m. ET, Herbalife's senior management team will host an investor conference call to discuss its recent financial results and provide an update on current business trends. AWS will be initiating a research report on Herbalife in the coming days.
Today, AWS is promoting its earnings coverage on PG; touching on HLF. Get our free coverage by signing up to:
During the quarter ended on March 31, 2017, P&G reported net sales of $15.61 billion which came in at 1% below $15.76 billion recorded at the end of Q3 FY16. Net sales numbers for the reported quarter fell short of market expectations of $15.71 billion. The net sales for the reported quarter faced 2% headwinds from foreign exchange. Meanwhile, organic sales increased 1% y-o-y, driven by 1% increase in organic shipment volume.
The world's largest consumer products maker reported Q3 FY17 net income attributable to of P&G of $2.52 billion, or $0.93 per diluted share, compared to $2.75 billion, or $0.97 per diluted share in Q3 FY16. The Company's core earnings per share increased 12% y-o-y to $0.96 in Q3 FY17. Wall Street had expected the Company to report core earnings per share of $0.94 per diluted share.
Operating Metrics
In Q3 FY17, the Company's gross profit fell to $7.77 billion from $7.84 billion in the prior year's same quarter. However, gross margin stood flat at 49.8% of net sales in Q3 FY17. Furthermore, the Company's core gross margin decreased 40 basis points y-o-y in Q3 FY17, which included 20 basis points foreign exchange headwinds.
P&G's Q3 FY17 operating income rose to $3.36 billion, or 21.5% of net sales, from $3.32 billion, or 21.1% of net sales, in Q3 FY16. Meanwhile, core operating profit margin was down by 10 basis points y-o-y, which included 20 basis points of foreign exchange impacts.
Segment Performance
During Q3 FY17, Beauty segment's net sales were down by 1% y-o-y to $8.61 billion. Meanwhile, the segment's net earnings from continuing operations declined 8% y-o-y in Q3 FY17 to $1.53 billion.
P&G's Grooming segment's net sales were $4.97 billion in Q3 FY17, which was 3% lower than the last year's recorded net sales numbers. However, the segment's Q3 FY17 net earnings from continuing operations grew 3% y-o-y to $1.22 billion.
Health Care segment reported net sales of $5.77 billion in Q3 FY17, up 4% y-o-y. The segment had a net earnings from continuing operations of $1.05 billion in Q3 FY17, growing 6% y-o-y.
The Company's Fabric & Home Care segment's net sales for Q3 FY17 fell 1% y-o-y to $15.53 billion. Furthermore, the segment's net earnings from continuing operations declined 6% to $2.05 billion in Q3 FY17.
In Q3 FY17, Baby, Feminine & Family Care segment's net sales were down by 1% y-o-y to $13.71 billion. Meanwhile, the segment's net earnings from continuing operations had also declined by 6% y-o-y to $1.93 billion in Q3 FY17.
Cash Flow & Balance Sheet
For the nine months ended March 31, 2017, P&G reported net cash flow from operations of $9.07 billion compared to $11.30 billion in the year ago comparable period. The Company had cash and cash equivalents balance of $5.82 billion as on March 31, 2017, compared to $7.10 billion at the close of books on June 30, 2016. Furthermore, the Company ended the year with total long-term debt of $16.63 billion compared to $18.95 billion as on June 30, 2016.
Dividend
In a separate press release on April 11, 2017, P&G's Board of Directors hiked quarterly cash dividend by 3% to $0.6896 per share. The dividend is payable on or after May 15, 2017, to Common Stock shareholders of record at the close of business on April 21, 2017. This dividend marked the Company's 61st consecutive annual dividend increase.
In Q3 FY17, the Company returned $3.8 billion to shareholders, in form of dividends amounting to $1.8 billion and $2 billion in the form of share repurchases.
Outlook
In its guidance for full FY17, P&G expects organic net sales growth to be in the range of 2% to 3%. The Company has maintained its core earnings per share expectation growth of mid-single digits y-o-y. Furthermore, the all-in GAAP earnings per share are expected to increase 48% to 50% versus FY16's GAAP EPS of $3.69. Moreover, FY17 GAAP EPS estimate is forecasted to include approximately $0.12 per share of non-core restructuring costs, $0.13 per share of charges related to early debt retirement, and a $1.95 gain from the divestiture of 41 Beauty Brands to Coty.
Stock Performance
On Friday, April 28, 2017, the stock closed the trading session at $87.33, marginally falling 0.41% from its previous closing price of $87.69. A total volume of 8.29 million shares have exchanged hands. Procter & Gamble's stock price advanced 1.47% in the last three months, 1.48% in the past six months, and 12.94% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 5.49%. The stock is trading at a PE ratio of 24.43 and has a dividend yield of 3.16%.
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