CINCINNATI - Procter & Gamble Co. posted a $2.7 billion profit on revenue of $16.5 billion in the first quarter of its 2017 fiscal year.
Both numbers were higher than Wall Street analysts were expecting. So, P&G shares are rising in pre-market trading Tuesday, up about 2 percent from yesterday’s $84.10 close.
“Our first quarter results mark a good start to the fiscal year,” said CEO David Taylor in a press release. “We’re pleased with the progress we’re making, but there is still more work to do to get back to the levels of balanced top- and bottom-line growth and cash generation that will consistently put P&G shareholder value creation among the best in our industry.”
This is the first quarter following the sale of 41 beauty brands to Coty Inc., so it’s an important early indicator of P&G’s ability to grow the business after two years of brand sales and cost cutting.
Profits were 4 percent higher than last year and 5 cents per share higher than analyst predictions. P&G reported adjusted earnings of $1.03 per share.
P&G’s revenue was $100 million lower than the same period last year, but $400 million higher than analysts predicted. Organic sales, excluding the impact of currency fluctuations and divestitures, grew 3 percent.
“Our growth was pretty broad-based,” said Chief Financial Officer Jon Moeller in a conference call with reporters. “I think that’s important to note. While health care grew at very attractive rates, so did most of the business. Our fabric and home care business was up 4 percent, grooming business up 3 percent. So, there’s pretty broad health from a top-line standpoint.”
P&G also reversed a slump in China, growing revenue by 2 percent in the quarter, compared to minus 2 percent in the prior six months and minus 8 percent in the six months before that. It continues to be impacted by foreign exchange problems in Latin America and the U.K., where the Brexit vote caused the British pound to decline.
Because of continuing global uncertainties, P&G maintained its previous forecasts of 2 percent organic sales growth for the year, with profits expected to rise in the mid single-digit range.