For Immediate Release
Chicago, IL - February 27, 2012 - Zacks.com announces the list
of stocks featured in the Analyst Blog. Every day the Zacks Equity
Research analysts discuss the latest news and events impacting
stocks and the financial markets. Stocks recently featured in the
blog include
Procter & Gamble Company
(
PG
),
Kellogg Company
(
K
),
Diamond Foods
(
DMND
),
Colgate Company
(
CL
) and
Unilever
(
UL
).
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free Profit from the Pros newsletter:
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Here are highlights from Friday's Analyst Blog:
5700 P&G Jobs on the Chopping Block
The world's leading consumer product maker
, Procter & Gamble Company
(
PG
) has announced that it will slash over 4,000 non-manufacturing
jobs during the current fiscal year. This declaration follows the
already planned 1,600 job losses, which was announced by the
company at the beginning of February 2012.
P&G anticipates that by trimming down 5, 700 jobs, it will
save up to $10 billion of cost, including $1 billion in marketing
costs and $3 billion in overhead costs, by the end of the fiscal
year ending in June 2016.
Out of its 129,000 employees, the company employs about 57,000
people as non-manufacturing staff. The job cuts announced makes
almost 10% of this workforce. The process of retrenchment is
scheduled to be completed by the end of the fiscal year ending June
2013. Most of the jobs would be eliminated through a voluntary
early-retirement program.
P&G has not been able to please its investors lately because
of delivering a disappointing second quarter 2012, with net
earnings from continuing operations sliding 49.0% year over year to
57 cents per share. The results were also 47.22% below the analyst
estimates. Profits were restricted on account of charges associated
with the Appliances and Salon Professional businesses.
Last week, P&G finally managed to shed its Pringles potato
chip business by striking a $2.7 billion deal with
Kellogg Company
(
K
) after its earlier plan fell apart when
Diamond Foods
(
DMND
), the original buyer, became embroiled in some accounting
problems.
To accommodate the new sale out, the company also lowered its
forecasts for the third-quarter 2012 net earnings from continuing
operations and core earnings to be in the range of 89-95 cents per
share compared to 91-97 cents per share, announced previously.
However the analysts' expected the third-quarter earnings to be
around $1.05 per share.
The decision to retrench comes at a time when uncertain economy
and high level of unemployment in the U.S. have induced the
customers to spend cautiously. This gave rise to low sales in the
U.S. and Europe. Moreover, high costs have brought the margins
down.
P&G had to reverse some price rises, which were meant to
help it to cope with higher materials costs after competitors did
not follow suit and it twice delayed the launch of new Tide Pod
detergent capsules because it could not match demand with its
supplies.
However, the increasingly competitive emerging markets with the
presence of stiff rivals like
Colgate Company
(
CL
) and
Unilever
(
UL
) has enabled P&G to bolster its presence in these promising
areas. Although the company is cutting ranks in the U.S., P&G
is hiring people in China where business is growing mid-double
digits.
P&G has also announced plans to add around 20 manufacturing
plants between 2010 and 2015 in countries like Brazil, China, South
Africa, Romania and Poland. However, the company has no plans to
open any plants in the U.S.
Currently P&G holds a Zacks #4 Rank (short-term Sell
rating). On a long-term basis, we maintain a Neutral recommendation
on the stock.
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COLGATE PALMOLI (
CL
): Free Stock Analysis Report
DIAMOND FOODS (
DMND
): Free Stock Analysis Report
KELLOGG CO (
K
): Free Stock Analysis Report
PROCTER & GAMBL (
PG
): Free Stock Analysis Report
UNILEVER PLC (
UL
): Free Stock Analysis Report
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