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Procter & Gamble shares slide as revenue misses analyst consensus estimate

Published 2024-07-30, 07:12 a/m
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Shares of Procter & Gamble (NYSE:PG) fell 2.6% premarket as the consumer goods giant reported a revenue miss in its fourth quarter despite posting a slight earnings per share (EPS) beat.

The company's Q4 EPS came in at $1.40, $0.03 above the analysts' estimate of $1.37. However, revenue for the quarter was $20.53 billion, falling short of the consensus estimate of $20.73 billion.

P&G's fourth-quarter net sales remained flat compared to the prior year, while organic sales, which exclude the impact of foreign exchange and acquisitions and divestitures, rose 2%. This growth was supported by a 1% increase in all-in volume and a 1% rise from higher pricing, which were offset by a 2% negative impact from foreign exchange.

The company's diluted net earnings per share for the quarter decreased by 7% year-over-year (YoY) to $1.27, primarily due to higher restructuring charges related to the substantial liquidation of operations in certain Enterprise Markets, including Nigeria.

Core net earnings per share, however, saw a 2% increase to $1.40, with currency-neutral core EPS up by 6% compared to the previous year.

Chairman, President, and CEO Jon Moeller commented on the results, highlighting the company's ability to meet or exceed plans for organic sales growth, core EPS growth, cash generation, and cash return to shareholders in a challenging economic and geopolitical environment.

Looking ahead to fiscal 2025, P&G provided guidance for all-in sales growth in the range of 2% to 4% versus the prior year, with organic sales expected to grow between 3% to 5%.

The company anticipates diluted net earnings per share growth of 10% to 12% over the fiscal 2024 GAAP EPS of $6.02. Core net earnings per share are projected to grow by 5% to 7% over the fiscal 2024 core EPS of $6.59.

This guidance suggests a range of $6.91 to $7.05 per share, with a mid-point estimate of $6.98, representing a 6% increase. This guidance is slightly above the analysts' consensus of $6.96.

The company also warned of a net headwind of around $500 million after-tax from unfavorable commodity costs and foreign exchange, equating to a $0.20 per share impact for fiscal 2025, or a three percentage drag on core EPS growth. Additional headwinds of $0.10 to $0.12 are expected from the non-repetition of benefits seen in the previous fiscal year.

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