Procter & Gamble Posts Earnings Beat, But Revenue Falls Short

However, revenue of $17.21 billion (up 4.6% year-over-year) missed the Street’s expectations by $80 million. Shares are rising marginally higher in Friday’s pre-market trading.

“Organic shipment volume increased six percent as strong consumer demand in North America and certain European markets due to the COVID-19 pandemic was partially offset by volume decreases in certain Asian markets due primarily to temporary disruption of consumer access to retail markets related to the COVID-19 pandemic” the company explained.

In particular organic sales for P&G’s fabric and home care segment rose 10% in the quarter while its baby, feminine and family care business saw a 7% organic sales bump.

For the full fiscal year, PG is now guiding for all-in sales growth of 3-4% from 4-5% previously, to reflect stronger headwinds from foreign exchange. However, the company maintained its guidance for organic sales growth in the range of 4-5%.

PG also revealed that it expects to pay over $7.5 billion in dividends and repurchase $7 billion to $8 billion of common shares in fiscal 2020.

From an analyst perspective, PG still boasts a bullish Strong Buy consensus with 10 recent buy ratings vs 3 hold ratings. Meanwhile the average price target of $130 indicates upside potential of 8%, with the stock down just 3% year-to-date. (See PG’s stock analysis on TipRanks)

“To us, the call on PG is simple: fundamentals are improving, but the stock is already pricing in market share stabilization” states RBC Capital analyst Nik Modi.

He has a hold rating on the stock with a $120 price target, adding: “We believe the high margin beauty business is particularly at risk in the June quarter.”

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