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Procter & Gamble Earnings Preview: The Absolute Essentials

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Procter & Gamble Fiscal 4th Quarter Earnings Preview

Publicada em: Economia e finanças

Procter & Gamble Earnings Preview: The Absolute Essentials

  1. 1. Procter & Gamble Earnings Preview: The Absolute Essentials P&G Fiscal 2014 Fourth Quarter Are investors looking for Cheer? Image: Procter & Gamble.
  2. 2. • P&G is shooting for 3%- 4% organic revenue growth this year. • On track through the first three quarters of fiscal 2014. • Company should hit at least 3% organic revenue growth in this final quarter of the fiscal year. Revenue “Tide on the Shelf” image by Lisa Brewster under Creative Commons license.
  3. 3. • Earnings have not impressed so far in fiscal 2014. • Through the first three quarters, operating income is up only 2.6% versus prior year. • Will P&G make up some ground in Q4? Earnings
  4. 4. • Productivity and cost cutting should help improve core gross margin sequentially from last quarter’s 48.9%. Productivity & Cost Cutting “Global Ops” image: Procter & Gamble.
  5. 5. • P&G measures “free cash flow productivity” (FCFP): free cash flow divided by earnings. • FCFP was 120% last quarter. • Cash flow should still be strong, but look for Q4 FCFP to be closer to last year’s total average of 95%, due to anticipated increased spending on capital equipment. Cash Flow
  6. 6. • P&G has kept a fairly leveraged balance sheet for years. • Traces back to Gillette acquisition in 2005/2006. • Look for any reduction in the $36.4 billion of long-term debt this quarter. Balance Sheet
  7. 7. • Bright spots: Double- digit growth in India for 47 consecutive quarters. • Hot spots: Any impacts from Russia & Ukraine? • Sinkholes: Updates on currency quagmires of Argentina, Venezuela. Bright Spots, Hot Spots, & Sinkholes Duracell marketing in Caracas, Venezuela metro. Image by Cabruta08 under Creative Commons license.
  8. 8. • P&G announced a total revamp of its North American supply chain earlier this year. • Converting existing single- category plants into multi- category facilities. • Progress in Q4? Supply Chain
  9. 9. • Look for update on initial sales of new Gillette Fusion ProGlide with Flexball razor. • Analysts will be eager to hear about innovation pipeline for fiscal 2015. Product Innovation Fusion ProGlide with Flexball image: Procter & Gamble.
  10. 10. • Share buybacks should be winding down, perhaps another $0.5 billion in Q4. • No surprises expected on stable dividend. Dividend and Share Repurchases P&G Research Facility, Singapore. Image: Procter & Gamble.
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