Procter & Gamble (NYSE:
) reported fiscal second quarter earnings Friday before the
market open beating analyst expectations on both the top and
bottom and lines. Shares rose slightly in the pre-market
following the release.
For the fiscal second quarter ended December, Procter &
Gamble reported core earnings per share of $1.22, well better
than analyst forecasts of $1.11 per share.
Also, revenue was better than expected, as the company
reported second quarter revenue of $22.2 billion compared to
forecasts of revenue of $21.91 billion. This beat in revenue
included a one percent impact from negative foreign exchange
movements as well.
There were two non-core items that were omitted from core
earnings per share in the quarter that investors should consider.
Procter & Gamble took a $0.05 per share charge for
restructuring costs in the quarter and also recorded a $0.21 per
share charge in the quarter following the buyout of a remaining
stake of a joint venture in Europe.
Notably, the company increased organic sales three percent in
the quarter, at the top-end of company guidance.
Further, organic sales growth was broad-based across product
lines with every product line seeing sales growth of at least two
percent in the quarter vs. the same period in the prior year.
Also, gross margins increased 110 basis points in the quarter and
operating cash flow was strong.
Procter & gamble raised its core earnings per share
guidance for the fiscal year 2013 to $3.97 to $4.07, up three
percent to up six percent versus prior year core EPS of
The company also raised its GAAP earnings per share guidance
to a range of $4.04 to $4.14, equating to growth of 10 percent to
13 percent versus prior year GAAP EPS of $3.66.
The increase reflects higher core earnings and an increase in
the non-core holding gain resulting from P&G's purchase of a
European joint venture. The EPS range also includes non-core
restructuring charges of $0.15.
"Our second quarter results were at the high end of our
expectations on the top-line and well ahead of forecast on
operating profit, earnings per share and cash flow," said
Chairman, President, and Chief Executive Officer, Bob
"Global market share trends improved as we continued to
implement our growth strategy and made very good progress against
our productivity and cost savings goals. Our strong first half
results have enabled us to raise our sales, earnings and share
repurchase outlook for the fiscal year, while we strengthen
investments in our innovation and marketing programs."
Procter & Gamble shares rallied nicely in the pre-market,
gaining 1.72 percent to $71.63. Should the stock open at or near
these levels, it would represent a new 52-week high for the
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