What was the financial performance of Procter & Gamble for the quarter ended December 31, 2001?

For the quarter ended December 31, 2001, Procter & Gamble reported net sales of $10.403 billion, a 2% increase year-over-year. Net earnings were $1.299 billion, or $0.93 per diluted share, up from $1.194 billion, or $0.84 per diluted share, in the prior year. The company also reported a significant increase in operating income to $1.864 billion.

What is the impact of the Clairol acquisition on the company's financial statements?

The acquisition of Clairol, completed on November 16, 2001, for $4.975 billion, is accounted for using the purchase method. Its results are included in the Beauty Care segment from the acquisition date. The acquisition increased goodwill and intangible assets on the balance sheet, and preliminary pro forma results suggest minimal initial dilution to earnings per share, with expectations of significant synergies.

How did restructuring charges affect the company's earnings?

The company recorded restructuring charges totaling $146 million after-tax ($189 million before tax) for the quarter ended December 31, 2001, related to its Organization 2005 program, primarily for employee separations and asset adjustments. Without these charges, core net earnings per share for the quarter were $1.03, compared to $0.97 in the prior year (which also excluded its own restructuring charges).

What is the company's liquidity and cash flow situation?

Procter & Gamble generated strong operating cash flow of $3.177 billion for the six months ended December 31, 2001, an increase of $0.912 billion from the prior year, largely driven by improvements in working capital. The balance sheet shows a healthy increase in cash and cash equivalents to $3.193 billion as of December 31, 2001. The company stated it does not have material off-balance sheet arrangements.

PG 10-Q Quarterly Report Q2 FY2002 — Revenue, Net Income, EPS

Summary

Procter & Gamble (PG) reported strong financial results for the quarter and six months ending December 31, 2001. Net sales increased by 2% to $10.4 billion for the quarter, driven by a 5% increase in unit volume. Net earnings for the quarter were $1.30 billion, or $0.93 per diluted share, representing a 9% increase over the prior year, after accounting for restructuring charges. The company highlights significant growth in its Beauty Care and Health Care segments, with Beauty Care boosted by the recent acquisition of Clairol. The company's strategic acquisition of Clairol for approximately $5 billion, financed primarily through debt, is expected to provide significant synergies and strengthen its position in the hair coloring market. The integration of Clairol is progressing, and while it incurred some integration costs, the Beauty Care segment saw strong earnings growth. Management also noted a significant increase in operating cash flow, up $0.9 billion for the six-month period, largely due to improved working capital management.

Key Highlights

1Net sales for the quarter increased 2% to $10.4 billion, with unit volume up 5%.
2Diluted earnings per share (EPS) for the quarter rose to $0.93, a 10.7% increase from $0.84 in the prior year, excluding restructuring charges.
3The company completed the $4.975 billion acquisition of Clairol on November 16, 2001, financed primarily with debt, and its results are now included in the Beauty Care segment.
4Operating income increased to $1.86 billion for the quarter, up from $1.71 billion in the prior year, reflecting improved gross margins and cost management.
5Cash generated from operating activities for the six-month period was $3.18 billion, a substantial increase of $0.92 billion compared to the same period last year.
6The company recorded restructuring charges totaling $146 million after-tax for the quarter related to its Organization 2005 program.
7Gross margin improved to 48.7% for the quarter, up from 46.8% in the prior year, driven by lower manufacturing costs and restructuring benefits.

PROCTER & GAMBLE Co Quarterly Report for Q2 Ended Dec 31, 2001

Summary

Key Highlights

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