(BFM Bourse) – The specialist in consumer hygiene products published its accounts for the second quarter of 2023-2024, missing the consensus on growth. But the profit turns out to be higher than expected.
With inflation encouraging consumers to laser-think their spending, the economic environment is proving difficult for Procter & Gamble. But the specialist in consumer hygiene products, known for its Ariel, Head & Shoulders and Pampers brands, manages to navigate without scaring the market.
The company unveiled, this Tuesday, its accounts for the second quarter of its 2023-2024 financial year ending next June.
Over this period (from October to December), Procter & Gamble saw its revenues reach $21.44 billion, which reflects growth of 3% in published data and 4% in comparable data. Figures that are a bit disappointing given that the Refinitv consensus cited by CNBC stood at $21.48 billion.
>> Access our exclusive graphic analyses, and gain insight into the Trading Portfolio
Volumes falling
Furthermore, volumes across all of the company’s divisions fell by 1%, with the increase in turnover being supported by the price increases implemented by the company. In feminine care, the group explicitly says that price increases have weighed on its volumes.
“What we saw this quarter was very low volumes in China, driven by what we’ve always said – a bumpy recovery,” Andre Schulten, the company’s chief financial officer, told Bloomberg. “We expect volumes to continue to accelerate in the second half. We are making progress,” he nevertheless continued.
The net result turns out to be better than expected. Net profit per share, one of the most important indicators in the United States, certainly fell by 12% to 1.4 dollars. However, this figure must be restated for an exceptional charge linked to the 2005 acquisition of Gillette ($1 billion after taxes due to the reduction in the fair value of intangible assets) and without impact on cash. This exceptional element was reported in December by Procter and Gamble.
Excluding this charge, net profit per share stood at $1.84 versus $1.70 expected by the Refinitv consensus.
Prospects that satisfy Wall Street
On Wall Street, the Procter & Gamble share is soaring (+5.1% around 4 p.m.), the market retaining, rather than the slight disappointment on the turnover, the pleasant surprise on the profit and the satisfactory outlook.
For the entire 2023-2024 financial year, the company has confirmed that it expects like-for-like revenue growth of 4% to 5%. The company lowered its net profit per share target, expecting a variation of between -1% and 0% compared to $5.9 in 2022-2023, compared to an increase of 6% to 9% previously. But here again this target includes the exceptional charge linked to Gillette.
“Basic” earnings per share, therefore restated for exceptional items, are on the contrary now expected to increase by 8% to 9%, compared to a previous range of 6% to 9%. Which amounts to counting on net income per share of $6.37 to $6.43.
“Proctor & Gamble’s better-than-expected Q2 earnings quality and stable fiscal 2024 outlook, combined with lower raw material costs, provide better volume support for the year ahead , which reinforces our confidence in the company’s ability to achieve its objectives”, appreciates Deborah Aitken, analyst at Bloomberg Intelligence.
Julien Marion – ©2024 BFM Bourse
Are you following this action?
Receive all the information on PROCTER GAMBLE in real time: