Consumer products giant,
The Procter & Gamble Company
) recently reduced its fiscal 2014 sales and earnings forecasts
to reflect the impact of higher-than-expected currency
Core earnings per share are expected to grow in the range of
3%-5% in fiscal 2014 down from 5%-7% to reflect currency rate
fluctuations in Venezuela and recent currency devaluations by
several other developing countries. Currency headwinds are now
expected to hurt 2014 earnings by 9%, higher than 7% as expected
earlier. On a constant currency basis, core earnings are still
expected to grow 12%-14%.
Net revenue growth is expected between 0% and 2%, down from
1%-2% due to higher-than-expected currency headwinds. Currency is
now expected to hurt revenues by 2%-3%, higher than 2% as
expected earlier. However, organic sales are still expected to
increase between 3% and 4% in fiscal 2014.
In addition to the Venezuelan bolivar swings, the earnings
outlook was adjusted to reflect the devaluation of the Argentine
peso, Turkish lira, South African rand, Russian ruble, Ukrainian
hryvnia, Brazilian real and several other currencies to the
United States dollar.
It is noteworthy that last year too P&G had lowered its
financial outlook to reflect headwinds from Venezuela's currency
devaluation. With around 60% of the company's business generated
outside North America, weakness in developing countries'
currencies lowers the value of revenues and profits earned in
Other Stocks to Consider
P&G carries a Zacks Rank #3 (Hold). Some better-ranked
consumer staples companies include
Post Holdings, Inc.
Kraft Foods Group, Inc.
The Hain Celestial Group, Inc
). All these stocks carry a Zacks Rank #2 (Buy).
HAIN CELESTIAL (HAIN): Free Stock Analysis
KRAFT FOODS GRP (KRFT): Free Stock Analysis
PROCTER & GAMBL (PG): Free Stock Analysis
POST HOLDINGS (POST): Free Stock Analysis
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