Market Overview

2 Big Dow Components Are Finding It Hard To Grow

2 Big Dow Components Are Finding It Hard To Grow

Generally speaking, the bigger the size of the company, the more difficult it is to grow. This concept was front-and-center after two major Dow components signaled to investors growing their business isn't an easy task.

Procter & Gamble

Shares of Procter & Gamble Co (NYSE: PG) were trading lower by more than 2 percent Wednesday after the $226-billion consumer packaged goods company reported its first-quarter results — in which earnings and revenue fell short of expectations.

According to a Bloomberg report, sales during the quarter fell 1 percent year-over-year to $15.6 billion, missing the $15.7 billion analysts were expecting. The company's new CEO David Taylor attributed the revenue miss to a slowdown in overall growth, geopolitical disruptions and foreign-exchange woes.

Meanwhile, the company's products may be out of favor among consumers who don't care about branding and place an emphasis on price. For example, sales of P&G's Gillette-branded razors and blades are facing pressure from upstart rivals such as Dollar Shave Club, which was acquired by rival Unilever plc (ADR) (NYSE: UL).

Overall, grooming products declined by 6 percent in the quarter with shaving products leading the way in declines.


Boeing Co (NYSE: BA), a fellow Dow component valued at $110 billion, also reported its first-quarter results Wednesday. Unlike P&G, Boeing's print was mixed as the company reported better-than-expected earnings per share but revenue fell short of expectations.

Revenue fell more than 7 percent to $20.976 billion, also missing the $21.34 billion analysts were expecting; Boeing delivered 169 commercial jets in the quarter, marking the fewest since the first quarter of 2014.

Looking forward, Boeing boosted its full-year 2017 earnings-per-share outlook from $9.10–$9.30 to $9.20–$9.40 per share. However, this doesn't mean the company's growth prospects and jet deliveries are expected to increase.

According to a separate Bloomberg report, Boeing's improved earnings outlook could be attributed to the better tax environment. More telling, the company didn't raise its cash outlook — a key metric for investors as orders for aircraft are fading late into the sales cycle.

"The stock has been a high flier for a while," George Ferguson, an analyst at Bloomberg Intelligence, said. "People clearly had high expectations and this was a middling report."

Related Links:

15 Stocks To Watch For April 26, 2017

Earnings Scheduled For April 26, 2017


Related Articles (BA + PG)

View Comments and Join the Discussion!

Posted-In: aircraft aircraft Sales BloombergEarnings News Movers Media Trading Ideas Best of Benzinga