UPDATE: Procter & Gamble Misses Q2 Expectations

Shares of

slipped more than 2% in pre-market trading after the company reported weaker-than-expected fiscal second-quarter earnings and cut its growth forecast for the year. The Cincinnati, Ohio-based company posted quarterly net earnings of $2.37 billion, or $0.82 per share, down from $3.43 billion, or $1.18 per share, in the year-ago period. Its core earnings, excluding non-recurring items, came in at $1.06 per share. Its sales declined 4% to $20.16 billion, while sales climbed 2% on an organic basis. However, analysts were expecting earnings of $1.13 per share on revenue of $20.6 billion. Beauty, Hair and Personal Care segment organic sales slipped 1%, while Grooming segment organic sales rose 2% in the quarter. Health Care segment organic sales gained 1%, while Fabric Care and Home Care segment organic sales climbed 3%. Baby, Feminine and Family Care segment organic sales surged 4% in the quarter. For the quarter, the company generated operating cash flow of $3.4 billion. It returned $3.7 billion in cash to shareholders during the quarter, including $1.8 billion in dividends and $1.9 billion of common stock repurchases. "The October - December 2014 quarter was a challenging one with unprecedented currency devaluations," said Chairman, President and Chief Executive Officer A.G. Lafley. "Virtually every currency in the world devalued versus the U.S. dollar, with the Russian Ruble leading the way. While we continue to make steady progress on the strategic transformation of the company - which focuses P&G on about a dozen core categories and 70 to 80 brands, on leading brand growth, on accelerating meaningful product innovation and increasing productivity savings - the considerable business portfolio, product innovation, and productivity progress was not enough to overcome foreign exchange." For the full fiscal year, Procter & Gamble now projects core EPS to be in the range of in-line to down low-single digits from previous year, versus a prior forecast of mid-single-digits. Procter & Gamble shares fell 2.37% to $87.40 in pre-market trading.