Summary
Procter & Gamble's (PG) Q2 2009 filing reveals a mixed financial performance impacted by the global economic downturn. While net sales saw a modest 3% increase to $42.0 billion for the first six months, this was largely driven by price increases as unit volume declined by 1% for the quarter and remained flat year-over-year for the six-month period. The company experienced a significant boost in net earnings, up 32% to $8.4 billion, primarily due to a substantial after-tax gain of $2.0 billion from the divestiture of its Folgers coffee business. Despite the headline earnings increase, the core business faced challenges. Operating income from continuing operations saw a slight decrease, and gross margins were pressured by higher commodity costs, partially offset by pricing actions and cost savings. The company's balance sheet showed a notable increase in cash and cash equivalents, but also a significant rise in debt due within one year. Investors should note the continued impact of foreign exchange headwinds and the ongoing efforts to manage costs in a challenging global economic environment.
Financial Highlights
28 data points| Revenue | $19.76B |
| Cost of Revenue | $9.80B |
| Gross Profit | $9.96B |
| SG&A Expenses | $5.91B |
| Operating Income | $4.05B |
| Interest Expense | $354.00M |
| Net Income | $5.00B |
| EPS (Basic) | $1.68 |
| EPS (Diluted) | $1.58 |
| Shares Outstanding (Diluted) | 3.17B |
Key Highlights
- 1Net sales for the six months ended December 31, 2008, increased 3% to $42.0 billion, driven by a 4% price increase, while unit volume decreased 1% for the quarter and was flat for the six-month period.
- 2Net earnings significantly increased by 32% to $8.4 billion, largely attributable to a $2.0 billion after-tax gain from the divestiture of the Folgers coffee business.
- 3Diluted net earnings per share (EPS) rose 37% to $2.61 for the six-month period, outpacing net earnings growth due to share repurchases and the Folgers transaction.
- 4Operating cash flow decreased by 20% to $5.6 billion for the six-month period, and free cash flow productivity was 51%.
- 5The company reported a substantial increase in 'Net Earnings from Discontinued Operations' ($2.04 billion for the quarter, $2.11 billion for the six months) primarily due to the Folgers divestiture gain.
- 6Goodwill and other intangible assets saw a decrease from $94.0 billion to $89.3 billion, reflecting a reduction primarily in the Snacks and Pet Care segment due to the coffee business divestiture.
- 7Total current liabilities increased significantly, driven by a substantial rise in 'Debt due within one year' from $13.1 billion to $21.9 billion.