Back to top

Analyst Blog

Procter & Gamble Company (PG - Analyst Report) recently reduced its third quarter and fiscal 2013 earnings expectations following headwinds from Venezuela’s currency devaluation.

The consumer giant lowered its previously provided fiscal 2013 core earnings guidance by 3 cents from a range of $3.97 – $4.07 to $3.94 – $4.04 to reflect the impact of the Venezuelan government’s recently announced plan to devalue its currency. In addition, P&G expects to record $200 million–$275 million (6 cents to 7 cents per share) in one-time charges from revaluation of its local balance sheet at the new exchange rate.

In the third quarter, the company expects to earn 90 cents to 96 cents, down from prior expectations of 91 cents to 97 cents, following the Venezuelan move.

P&G, which reported excellent second quarter fiscal 2013 results last month, maintained its sales outlook for fiscal 2013 as well as the third quarter, which was announced with its second quarter results.

Organic sales are expected to grow in a range of 3% to 4%. Net revenue is expected to rise between 1% and 2%. For the third quarter, the company expects both net and organic revenues to range between 3% and 4%.

Fiscal 2012 was a tough year for P&G and the company plans to implement some meaningful changes to re-accelerate its top and bottom-line growth in keeping with its peer companies.

P&G plans to improve results in developed markets while maintaining momentum in the developing nations. The company is focusing resources on the 40 largest and most profitable businesses, most of which are in developed markets. These businesses account for about 50% of sales and 70% of operating profit. The company is also focusing on driving its 20 biggest innovations like Tide Pods, Always Radiance, Bounty Trap & Lock and Bounty Unstoppables in more markets in fiscal 2013. Moreover, the company is concentrating on its 10 most important developing markets.

In addition, the company has implemented costs savings and productivity improvement initiatives in order to improve margins. All these efforts are bearing fruit as evident from 2 back-to-back solid quarterly results in the first half of fiscal 2013.

P&G carries a Zacks Rank #2 (Buy) following its solid second quarter results, which beat both the company as well as Zacks’ expectations. Other consumer staples companies which are currently worth considering include ConAgra Foods, Inc. (CAG - Analyst Report) – Zacks Rank #1 (Strong Buy), Kellogg Company (K - Analyst Report) - Zacks Rank #2 (Buy) and Church & Dwight Co. Inc. (CHD - Snapshot Report) - Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.44 +5.21%
BITAUTO HOL… BITA 81.71 +5.12%
CTPARTNERS… CTP 16.66 +4.26%
CHINA BIOLO… CBPO 47.91 +3.30%
MALLINCKROD… MNK 72.94 +2.85%