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P&G forecasts higher profit as pandemic drives cleaning boom

Published 07/30/2020, 07:32 AM
Updated 07/30/2020, 07:45 AM
© Reuters. The logo for Procter & Gamble Co. is displayed on a screen on the floor of the NYSE in New York
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(Reuters) - Procter & Gamble Co (N:PG) forecast full-year sales and profit above Wall Street expectations on Thursday, benefiting from a surge in demand for detergents and toilet paper as pandemic lockdowns prompt cleaning drives at homes.

Shares of the company rose about 2% in premarket trading after it also beat analysts' expectations for fourth-quarter revenue and profit.

Hunkered down at home, people have focused on housekeeping and better hygiene, driving sales of P&G's Bounty paper towels, Charmin toilet paper and Tide detergent among other products.

P&G now forecasts fiscal 2021 adjusted profit to rise between 3% to 7% or $5.27 to $5.48 per share, while analysts were expecting profit of $5.23 per share, according to IBES data from Refintiv.

The company also expects sales to grow in the range of 1% to 3%, compared with estimates of a 1.93% rise.

In the quarter ended June 30, sales from P&G's fabric and home care unit, its biggest business that makes Ariel detergent and Downy fabric softener saw 11% increase to $6.29 billion.

Net earnings attributable was $2.80 billion, or $1.07 per share, in the fourth quarter ended June 30, compared with a loss of $5.24 billion, or $2.12 per share, a year earlier. The year ago quarter had an impairment charge of about $8 billion.

Excluding one-time items, the company earned $1.16 per share above estimates of $1.01.

© Reuters. The logo for Procter & Gamble Co. is displayed on a screen on the floor of the NYSE in New York

The maker of Tide and Gillette products posted net sales of $17.70 billion, beating analysts' average estimate of $16.97 billion, according to IBES data from Refintiv.

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