Procter & Gamble’s Q4 results beat expectations

The Procter & Gamble Company (NYSE: PG) surpassed market expectations for revenue and earnings in the fourth quarter of 2019. Shares gained 3.6% in premarket hours on Tuesday.

Net sales grew 4% year-over-year to $17.1 billion, beating estimates of $16.8 billion. Organic sales rose 7%, driven by a 3% increase in organic shipment volume. Organic sales also benefited from higher pricing and positive mix.  

On a GAAP basis, the company reported a net loss of $5.2 billion, or $2.12 per share, compared to a net income of $1.8 billion, or $0.72 per share, in the prior-year quarter, mainly due to one-time, non-cash accounting adjustments to the carrying values of the Gillette Shave Care business.

Core EPS grew 17% to $1.10, driven by strong organic sales growth and core operating margin expansion, topping forecasts of $1.05. Currency-neutral core EPS increased 26%.    

During the quarter, P&G saw net sales growth in all its business segments, except Grooming, which fell 3%. Health Care posted the highest increase of 13%. Organic sales increased across all segments, with Grooming posting an increase of 4%.  

Within the Beauty segment, Skin and Personal Care organic sales growth was driven by market growth, positive product mix and increased pricing. Within Grooming, organic sales in Shave Care rose low single digits helped by growth in developed regions.  

In the Health Care business, organic sales in Oral Care and Personal Health Care saw increases helped by favorable mix and pricing. Pricing also benefited organic sales in the Fabric and Home Care as well as Baby, Feminine and Family Care segments.  

P&G expects fiscal year 2020 all-in sales growth of 3-4% versus the prior fiscal year. Organic sales growth is also expected to be 3-4%. GAAP EPS is expected to grow 222% to 240%. Core EPS is expected to increase 4-9% versus fiscal 2019 Core EPS of $4.52. 

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