"I think the stock should do fairly well because obviously folks were concerned that they (P&G) were going to guide down [earnings estimates] for the back half of the year and maybe even miss this quarter," said Jim Gingrich, consumer products analyst at Sanford Bernstein.
P&G said earnings for the second quarter, ended Dec. 31, were $1.31 billion, or 93 cents per diluted share, up from $1.26 billion, or 88 cents a share, a year earlier. The results for both years exclude restructuring charges.
Analysts on average had expected the company to earn 92 cents a share, according to First Call/Thomson Financial, which tracks such estimates.
"We delivered the earnings per share results we said we would — for the second quarter in a row," P&G Chief Executive Officer Alan Lafley said. Lafley succeeded Durk Jager as chief executive last June, after the company's stock was rocked by a series of missed profit forecasts. "Still, we can and must do better. Our goal is to get back to consistent annual double-digit earnings per share growth."
Second-quarter revenue fell 4 percent, to $10.18 billion from $10.59 billion a year earlier, as the weak euro cut into sales. Unit volume fell 2 percent compared with record levels a year ago.
P&G said it expects third-quarter earnings of 72 to 74 cents a share before unusual items. Analysts' consensus forecast is 73 cents, according to First Call. In the year-ago third quarter P&G earned 64 cents a share.
Unit volume is expected to be flat to down 2 percent in the third quarter, with sales up in the low single digits, excluding the impact of foreign exchange, P&G said.
Analysts have forecast core earnings per share for P&G of $3.10 to $3.17 for the full fiscal year, up from $2.95 in the previous year. The company reiterated that it was comfortable with the high end of this range of estimates.
Based on current trends and expectations, the company said it now expects unit volume to be about flat for the year, and sales, excluding foreign exchange effects, to be up 2 to 4 percent.
In the past year the stock, a component of the Dow Jones industrial average, has underperformed that index by about 30 percent.
In recent months P&G has raised prices on its products to try to cope with rising costs. Most of those price boosts have been matched by competitors, but in some instances the increases were not matched, causing P&G to lose market share. BACK TO TOP
UPS Cuts 2001 Outlook, Misses Expectations
United Parcel Service, the world's No. 1 package delivery company, reported today a profit slightly above lowered Wall Street expectations and cut its earnings forecast for 2001 because of a slowing economy.
Atlanta-based UPS, which reported last month the slowing U.S. economy was cutting into its domestic package delivery volumes, said it expected earnings per share to grow 9 percent to 11 percent this year, down from a previous estimate in the "mid-teens."
The company also said revenue growth would likely fall within a range of 8 percent to 10 percent this year. Last month, it said it expected to post revenue growth of 10 percent barring further slowing in the economy.
"Our rate of growth this year will not be at the same pace as we've seen in the last few years domestically," UPS Chief Financial Officer Scott Davis said in a statement accompanying fourth-quarter financial results. "But we do expect to grow, and at a rate faster than the domestic package market."