P&G Earnings: Margins Turn Around as Net Income POPS

S&P 500 (NYSE:SPY) component Procter & Gamble Co. (NYSE:PG) reported net income above Wall Street’s expectations for the fourth quarter. Procter & Gamble sells and markets consumer products such as pharmaceuticals, cleaning supplies, personal care, and pet supplies in more than 180 countries.

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Procter & Gamble Co. Earnings Cheat Sheet

Results: Net income for Procter & Gamble Co. rose to $3.63 billion ($1.24 per share) vs. $2.51 billion (84 cents per share) in the same quarter a year earlier. This marks a rise of 44.7% from the year-earlier quarter.

Revenue: Fell 1.2% to $20.2 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Procter & Gamble Co. reported adjusted net income of 82 cents per share. By that measure, the company beat the mean estimate of 77 cents per share. Analysts were expecting revenue of $20.3 billion.

Quoting Management: “We enter fiscal 2013 with very strong developing market momentum, strengthened plans on our core developed market business, and with the benefit of a $10 billion cost savings program, which is well underway,” said Chairman, President and Chief Executive Officer, Bob McDonald. “Despite a difficult macro environment, we see significant opportunities for top- and bottom-line growth.”

Key Stats:

Last quarter’s profit increase breaks a three-quarter run of year-over-year profit decreases. In the third quarter, net income fell 16.1% from the year earlier, while the figure dropped 49.3% in the second quarter and 1.9% in the first quarter.

The company has now beaten analyst estimates for three quarters in a row. It beat the mark by one cent in the third quarter and by 2 cents in the second quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from $1.12 a share to $1.03 over the last ninety days. The average estimate for the fiscal year is $3.80 per share, down from $3.96 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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