Procter & Gamble posted a 14% increase in fiscal Q1 net income to $3.08 billion, or $0.92/share. Excluding a $0.02/share tax benefit, EPS beat the Street's consensus estimate of $0.89. Sales growth of 7.5% to $20.2B was in-line with analyst estimates. For fiscal Q2, P&G forecast EPS of $0.95 to $0.97, compared to analyst estimates of $0.97. For the full fiscal year, P&G raised its EPS guidance to $3.46 to $3.49, citing a $0.02/share tax benefit compared to its earlier guidance. Analysts were expecting $3.47/share, on average. P&G also raised its full year sales expectations by 1%, to 6% to 8%, based on positive forex impact. P&G said every reportable segment delivered mid-single digit or higher sales growth in Q3, while organic sales rose 5%, in-line with its 4% to 6% target. Higher commodity prices hurt gross margins by 80 basis points, but overall, gross margins improved 10 basis points to 52.9%, as volume leverage, cost saving projects and pricing offset higher input costs. In a statement, CEO A.G. Lafley commented that "the fiscal year is off to a good start" and the company is "confident it will deliver another strong year of growth." (Earnings call transcript later today). P&G repurchased $2.6B of its common stock during the quarter. Shares of P&G gained 0.1% to $71.83 on Monday, but were off 2.9% to $69.75 in thin pre-market activity.
Commentary: This Week's Key Earnings Reports • Procter & Gamble Weighing Sale of Pringles, Folgers, Duracell • Jeffrey Saut: It's Time To Own Tangibles
Stocks to watch: PG. Competitors: KMB, JNJ, CL. ETFs: DIA, XLP, VDC, PRFG