P&G reports mixed earnings, higher prices boost revenue
Consumer goods company P&G reported a three percent rise in revenue in the second quarter, slightly lower than analysts expected
New York – Consumer goods giant Procter & Gamble painted a mixed picture in its earnings report Tuesday, as price hikes supported revenue growth but customers appeared to pull back in some purchases.
The company behind Bounty paper towels, Gillette razors and Tide detergent saw its revenue rise three percent from a year ago to $21.4 billion in the quarter ending in December.
This was slightly lower than expected, and analysts are eyeing the performance of P&G and other consumer companies on whether they can keep prices up even as inflation cools.
P&G also reported that earnings per share had dropped 12 percent to $1.40, partially due to logging a $1.3 billion charge on its Gillette business.
The company said last year it would book the charges as it adjusted the value of the razor brand.
Excluding that one-time hit, P&G’s net earnings per share jumped 16 percent to $1.84, beating expectations.
The increase was driven by a rise in net sales and increase in core operating margin, the company said.
But P&G’s product volumes were flat overall for the quarter, suggesting that consumers may be pulling back as higher prices bite.
It maintained its organic sales growth outlook in the range of four to five percent.
This measure excludes the impacts of acquisitions, divestitures and currency fluctuations.
P&G shares were up 1.6 percent in pre-market trading.