P&G Announces Fourth Quarter 2012 Core EPS Of $0.82

The Procter & Gamble Company (NYSE:PG) increased organic sales for the April-June quarter by three percent driven by price increases, partially offset by geographic mix. Net sales were $20.2 billion, a decrease of one percent versus the prior year period. Foreign exchange reduced net sales by four percent. The Company continued to deliver broad-based organic sales growth, with four of five business segments increasing versus the prior year.

Diluted net earnings per share from continuing operations were $0.74, including non-core charges of $0.08 per share. Core net earnings per share were $0.82, consistent with the prior year period and $0.03 per share above the top-end of the Company’s guidance range. Additionally, P&G completed the sale of the Snacks business in the quarter, resulting in a net gain of $0.48 per share.

“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.”

Executive Summary

• Organic sales increased three percent for the quarter.
• Organic sales growth was broad-based, with four of five business segments increasing organic sales.
• Core operating profit increased four percent. Including non-core charges, operating profit decreased four percent.
• Core net earnings per share were in line with the prior year period at $0.82. The benefits from cost savings and pricing were offset by the decrease in net sales and higher commodity costs.
• Diluted net earnings per share were $1.24, an increase of 48 percent due to the gain on sale of the Snacks business, partially offset by non-core charges. The non-core items included incremental restructuring charges due to the productivity and cost savings plan.
• Diluted net earnings per share from continuing operations were $0.74, a decrease of 10 percent due to non-core restructuring charges.
• Operating cash flow was $4.0 billion for the quarter and free cash flow, which is operating cash flow less capital spending, was $2.7 billion. Adjusted free cash flow productivity was 142 percent of net earnings.

April - June Quarter Discussion

Net sales decreased one percent to $20.2 billion in the April – June quarter. Organic sales grew three percent. Volume was in line with the year ago period. Broad-based price increases across all segments and regions increased net sales by four percent. This represented the fourth consecutive quarter in which positive pricing contributed four percent or more to net sales growth. Unfavorable foreign exchange reduced net sales growth by four percent. Geographic mix reduced net sales by one percent.

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