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Things to Note Ahead of Procter & Gamble's (PG) Q4 Earnings

The Procter & Gamble Company PG is set to report fourth-quarter fiscal 2020 results on Jul 30, before the opening bell. In the last reported quarter, the leading branded consumer products company delivered an earnings surprise of 4.5%. Moreover, its bottom line beat estimates by nearly 5.6%, on average, over the trailing four quarters.

The Zacks Consensus Estimate for the company’s fiscal fourth-quarter earnings stands at $1.00, indicating a 9.1% decline from the year-ago quarter’s reported figure. However, the consensus mark has been unchanged in the past 30 days. For fiscal fourth-quarter revenues, the consensus mark is pegged at $16.86 billion, suggesting a 1.4% decrease from the prior-year quarter’s reported figure.

Key Factors to Note

Procter & Gamble’s sales have been gaining from its efforts to make cleaning and personal care products available during this COVID-19 crisis. It is witnessing an increased demand for hand soaps, detergents and surface cleaning products. Notably, the company’s fourth-quarter fiscal 2020 performance is likely to have benefited from the continued functioning of its businesses and strong demand for its products.

Further, strong organic shipment volumes backed by robust consumer demand for the company’s products in North America and certain European markets have been key drivers. Moreover, management has also been focusing on productivity and cost-saving plans, which might have cushioned margins in fourth-quarter fiscal 2020.

While the aforementioned factors raise optimism about the upcoming quarterly results, we remain wary of the adverse impacts of currency fluctuations on the company’s top and bottom lines. In fact, Procter & Gamble, in its last earnings call, lowered the fiscal 2020 sales view due to stronger headwinds from foreign exchange rates. The company had projected all-in sales to grow 3-4% for the second quarter. The guidance includes a two-percentage-point adverse foreign currency impact, which is likely to be offset by modest gain from acquisitions and divestitures.

Zacks Model

Our proven model does not conclusively predict an earnings beat for Procter & Gamble this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Procter & Gamble carries a Zacks Rank #2 but an Earnings ESP of -0.13%.

Procter Gamble Company The Price and EPS Surprise

Procter  Gamble Company The Price and EPS Surprise

Procter Gamble Company The price-eps-surprise | Procter Gamble Company The Quote

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Medifast, Inc. MED presently has an Earnings ESP of +0.36% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Clorox Company CLX has an Earnings ESP of +0.59% and a Zacks Rank #2, at present.

BGS Foods BGS currently has an Earnings ESP of +1.56% and a Zacks Rank #2.

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The Clorox Company (CLX): Free Stock Analysis Report

BG Foods, Inc. (BGS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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