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What's in Store for Procter & Gamble (PG) in Q2 Earnings?

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The Procter & Gamble Company (PG - Free Report) is set to report second-quarter fiscal 2020 results on Jan 23, before the opening bell. In the last reported quarter, the leading branded consumer products company delivered a positive earnings surprise of 10.5%. Moreover, its bottom line beat estimates by 4.9%, on average, over the trailing four quarters.

The Zacks Consensus Estimate for the company’s fiscal second-quarter earnings stands at $1.37, indicating 9.6% growth from the year-ago quarter’s reported figure. Further, the consensus mark has been unchanged in the past 30 days. For the fiscal second-quarter revenues, the consensus mark is pegged at $18.35 billion, suggesting a 5.1% increase from the prior-year quarter’s reported figure.

Procter & Gamble Company (The) Price and EPS Surprise

 

Procter & Gamble Company (The) Price and EPS Surprise

Procter & Gamble Company (The) price-eps-surprise | Procter & Gamble Company (The) Quote

Key Factors to Note

Procter & Gamble has been consistently delivering strong earnings and sales performance. Strong organic sales growth, backed by higher shipment volume and favorable price/mix, has been a key growth driver for earnings. Further, the company’s growth initiatives, including product improvement through innovation, packaging and marketing efforts, are likely to have aided the top and bottom lines in the to-be-reported quarter.

Management also remains focused on productivity and cost-saving plans, which might have cushioned margins in second-quarter fiscal 2020. The company’s continued investment in business, and balanced top and bottom-line growth alongside efforts to offset macro cost headwinds underscore its productivity efforts. These actions have been aiding Procter & Gamble in the past quarters.

Additionally, the company focuses on improving the product portfolio through strategic initiatives, which enable it to concentrate on its fast-growing businesses. To streamline its portfolio, it relies on the strategy of acquiring complementary businesses and follows a systematic divestiture plan. These acquisitions and divestitures will help the company to concentrate on core businesses that have greater growth potential, thus boosting top-line growth in quarters ahead.

While the aforementioned factors raise optimism about the upcoming quarterly results, we remain wary of the adverse impacts of currency fluctuations on its top and bottom lines.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Procter & Gamble this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Procter & Gamble has a Zacks Rank #2 and an Earnings ESP of +0.91%.

Other Stocks Poised to Beat Earnings Estimates

Here are some other companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:

e.l.f. Beauty Inc (ELF - Free Report) has an Earnings ESP of +23.03% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tyson Foods, Inc (TSN - Free Report) currently has an Earnings ESP of +1.77% and a Zacks Rank #3.

Church & Dwight Co., Inc (CHD - Free Report) presently has an Earnings ESP of +2.00% and a Zacks Rank of 3.

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