Procter & Gamble Posts In-Line Q3 Earnings, But Sales Miss Estimates

reported in-line earnings for the third quarter, but the company's sales missed analysts' estimates. The Cincinnati, Ohio-based company posted quarterly net income of $2.15 billion, or $0.75 per share, compared to $2.61 billion, or $0.90 per share, in the year-ago period. Core earnings per share slipped 8 percent to $0.92. Its revenue declined 8 percent to $18.14 billion from $19.64 billion, while organic sales rose one percent. However, analysts were expecting a profit of $0.92 per share on revenue of $18.49 billion. Beauty, Hair, and Personal Care segment organic sales slipped 3 percent year-over-year, while Grooming segment organic sales climbed 9 percent. Health Care segment organic sales rose 6 percent, while Baby, Feminine and Family Care segment organic sales climbed 2 percent in the quarter. Reported gross margin declined 30 basis points, while core gross margin rose 20 basis points. Operating cash flow for the third quarter was $3.6 billion. The average estimate among 32 Estimize users was for earnings of $0.95 per share and revenue of $18.76 billion. "Our third quarter earnings results were largely in-line with what we had expected," said Chairman, President, and Chief Executive Officer A.G. Lafley. "We delivered double-digit constant currency core EPS growth with significant currency-neutral gross and operating margin expansion from over 400 basis points of productivity savings from programs that continue to gain momentum. This quarter the productivity progress was offset by foreign exchange. As we have done before, we'll offset foreign exchange over time through a combination of pricing, mix enhancement and cost reduction." P&G projects FY sales to decline 5 percent to 6 percent. It also projects organic sales to rise in low single digits. Procter & Gamble shares fell 0.35 percent to $82.80 in pre-market trading.