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 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. 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) UL. Boeing Boeing Co 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. 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. Related Links: 15 Stocks To Watch For April 26, 2017 Earnings Scheduled For April 26, 2017

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.

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

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.

"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."

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Posted In: EarningsNewsMoversMediaTrading Ideasaircraftaircraft SalesBloombergBloomberg IntelligenceBoeingDavid TaylorDOWDow ComponentsDow EarningsGeorge FergusonGilletteRazorsShaving
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