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Procter & Gamble Reported Mixed Results for Fiscal 3Q16

Tuesday's Consumer Pops and Drops: WHR, PG, HSY, and TEN

(Continued from Prior Part)

Price movement of Procter & Gamble

Procter & Gamble (PG) has a market cap of $216.3 billion. PG fell by 2.3% to close at $79.55 per share on April 26, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -4.5%, -2.9%, and 1.9%, respectively, as of the same day.

This means that PG is trading 3.2% below its 20-day moving average, 2.7% below its 50-day moving average, and 4.2% above its 200-day moving average.

Related ETF and peers

The Market Vector Wide Moat Research ETF (MOAT) invests 5.7% of its holdings in Procter & Gamble (PG). This ETF tracks an equal-weighted index of 20 companies that Morningstar determines to have the highest fair value among firms with a sustainable competitive advantage. The YTD price movement of MOAT was 12.4% as of April 25, 2016.

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The market caps of PG’s competitors are as follows:

  • Johnson & Johnson (JNJ) – $312.1 billion

  • Kimberly-Clark Corporation (KMB) – $46.4 billion

  • Church & Dwight Company (CHD) – $11.7 billion

Performance of Procter & Gamble in fiscal 3Q16

Procter & Gamble (PG) reported fiscal 3Q16 net sales of $15,755.0 million, a fall of 6.9% compared to $16,930.0 million in fiscal 3Q15. Sales from its Beauty; Grooming; Healthcare; Fabric Care and Home Care; and Baby, Feminine, and Family Care segments fell by 8%, 10%, 7%, 4%, and 8%, respectively, in fiscal 3Q16, compared to fiscal 3Q15. The company’s cost of products sold as a percentage of net sales fell by 5.7%, and its operating income rose by 9.7% in fiscal 3Q16 compared to fiscal 3Q15.

The company’s s net income and EPS (earnings per share) rose to $2,750.0 million and $0.97, respectively, in fiscal 3Q16 compared to $2,153.0 million and $0.75, respectively, in fiscal 3Q15.

PG’s cash and cash equivalents rose by 15.5%, and its inventories fell by 0.44% in fiscal 3Q16 compared to fiscal 4Q15. Its current ratio and debt-to-equity ratio rose to 1.1x and 1.13x, respectively, in fiscal 3Q16, compared to 1.0x and 1.05x, respectively, in fiscal 4Q15.

Projection

Procter & Gamble (PG) has made the following projections for fiscal 2016:

  • organic sales growth of in-line up to low-single digits

  • all-in sales to be down in the high-single digits, which includes a -6% to -7% impact from foreign exchange and 2%–3% impact from the combined impact of Venezuela deconsolidation and minor brand divestitures

  • core EPS down in the range of 3%–6%

  • all-in GAAP EPS growth in the range of 46%–51%

In the next part, we’ll discuss Hershey Company.

Continue to Next Part

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