Procter & Gamble Company (NYSE:PG) Posted Positive Earnings For Its Second Quarter For Fiscal 2017; Investors Should Keep Monitoring Its Stock Performance In The Market.
American consumer good company Procter & Gamble Co. released its second quarter earnings report for fiscal 2017, beating most forecasts set for the company. The report was published before the opening of markets on Friday.
“Stronger top-line performance in the first half of the fiscal year is enabling us to increase our organic sales growth outlook for the full year – another step towards the levels of balanced top-line, bottom-line, and cash flow growth that will consistently put P&G shareholder value creation among the best in our industry,” stated P&G Chair, President, and CEO David Taylor.
Second Quarter Earnings
P&G has reported earnings of $1.08 per share, or 4% increase, surpassing analyst forecasts of $1.06 per share increase for the October – December quarter.
The net sales for the quarter was at $16.9 billion and although sales were unchanged from the previous quarter and the same period last year, while the diluted net earnings per share was at $2.88, surging 157% higher from the previous year. Organic sales and organic volume experienced a boost in all the five business subsidiaries of the company, with an increase of 2% each. However, there was a 2% decline under the foreign exchange sector.
Under the grooming segment, a 1% increase was added to the sales. Shave Care performed well in organic sales outside the US, seeing low single digits globally. Health care saw a good boost of 7% under higher organic volume from Oral Care and Personal Health Care, while the Fabric and Home care, organic sales also climbed 1% from the previous year report. Under Baby, Feminine, and Family care, a 1% incline was also added.
Most increases seen on each segment of the company came from product innovations and better marketing support, developed and performed by P&G throughout the quarter.
Meanwhile, the company’s operating cash flow was at $3 billion, with an adjusted free cash flow productivity of 82%.
P&G benefitted most from its Beauty brands, like brands Pantene and Head & Shoulders seeing 3% increase for the Beauty organic sales. Most of the boost came from the Hair Care and Skin & Personal Care sector.
P&G has raised its sales growth projection to around 2-3% from the previous earlier forecast of 2% for fiscal 2017.
Stock Activity
Shareholders received a total of $1.8 billion as dividends for the second quarter, and P&G repurchased a total of $1.5 billion of common stock with exchanged shares with a value of $9.4 billion under the Beauty Brands sector.
The company’s stock performed extremely well after the early release of its earnings report for the second quarter of fiscal 2017. As seen on the image below, P&G stock was trading $84.70 prior to the release of Q2 earnings, but the stock experienced a sharp surge after the positive earnings reports and traded to as high as $87.96, or 2.17% higher, as the stock gapped the following trading session.
However, on the Monday session, P&G lost its gains from the Friday session, closing in at $86.96, losing 0.56% of its previous gains in the market. P&G’s RSI was at level 68.81 during the release date of Q2 earning, but before the stock could reach level 70 on the index and bounce back from an overbought status, the stock started declining on Monday and is currently at level 64.45.
P&G currently has a #3 Zacks “Hold” ranking.
Conclusion
Investors can remain bullish on P&G’s performance, since the company has been delivering to its promises for the past quarters, with consistent company performance and positive earnings reports. Procter & Gamble has exhibited promising profit growth with continuous market-leading sales.