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Procter & Gamble Posts Earnings Beat Though Cautions Against Headwinds

Procter & Gamble posts fiscal fourth-quarter earnings that beat forecasts though cautions of 'headwinds' related to commodities prices impacting future earnings.

Procter & Gamble  (PG) - Get Procter & Gamble Company Report posted fiscal fourth-quarter earnings on Friday that beat analysts’ forecasts as demand for its home and beauty products that surged through the pandemic continued to drive sales, though cautioned that rising commodities prices will likely impact future earnings.

The maker of Tide detergent and Luvs diapers said it earned $2.91 billion, or $1.13 a share, in its fiscal fourth quarter ended June 30, up from $2.8 billion, or $1.07 a share, in the comparable year-ago period. Analysts polled by FactSet had been expecting per-share earnings of $1.08.

Revenue rose 7% to $18.9 billion from $17.7 billion, ahead of analysts’ forecasts of $18.4 billion, driven by increases in beauty, health, grooming and fabric and homecare sales, the Cincinnati-based company said.

“We built strong momentum prior to the pandemic and have strengthened our position further,” CEO David Taylor said in a statement. 

“As we look forward to fiscal 2022, we expect to continue to grow top-line and bottom-line and to deliver another year of strong cash return to shareholders despite a challenging cost and operating environment.”

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For fiscal 2022, P&G said it expects all-in sales growth in the range of 2-4% versus the prior fiscal year, with diluted per-share earnings growth in the range of 6-9% versus above fiscal 2021 earnings of $5.50 a share. 

Analysts polled by FactSet are currently forecasting fiscal full-year earnings of $5.91 a share.

At the same time, P&G said its current outlook estimates “headwinds of approximately $1.9 billion after-tax from higher commodity costs and freight costs,” which it expects to be partially offset by after-tax foreign exchange benefits of approximately $100 million.

"The combined impact of commodities, freight and foreign exchange is approximately a $0.70 per share headwind to fiscal year 2022 EPS, or a 12-percentage-point headwind to EPS growth," P&G said.

At last check, shares of P&G were up 3.1% at $143.80. Year to date to stock is up 4.34%