Summary
Procter & Gamble's (PG) Q2 FY2010 report (ended December 31, 2009) shows a solid performance with a 6% increase in net sales to $21.0 billion, driven by a 5% rise in unit volume and favorable foreign exchange. Net earnings from continuing operations grew 12% to $3.1 billion, reflecting improved gross margins due to lower commodity costs and cost savings, alongside reduced interest expenses. However, diluted net earnings per share decreased by 6% to $1.49, largely influenced by a significant drop in net earnings from discontinued operations. This decline in discontinued operations was primarily due to lower gains from the sale of assets compared to the prior year, particularly the sale of the pharmaceuticals business ($1.5 billion gain) versus the coffee business sale ($2.0 billion gain in the prior year). The company highlights a 3% increase in organic sales for the six-month period, indicating underlying business strength despite a challenging global economic environment. The report also details a significant charge of $267 million related to potential competition law fines in Europe, impacting SG&A expenses. Management continues to focus on driving value through innovation, cost management, and strategic portfolio adjustments, including the completed divestiture of its pharmaceuticals business.
Financial Highlights
50 data points| Revenue | $21.03B |
| Cost of Revenue | $9.74B |
| Gross Profit | $11.29B |
| SG&A Expenses | $6.64B |
| Operating Income | $4.66B |
| Interest Expense | $224.00M |
| Net Income | $4.66B |
| EPS (Basic) | $1.58 |
| EPS (Diluted) | $1.49 |
| Shares Outstanding (Diluted) | 3.12B |
Key Highlights
- 1Net sales increased by 6% to $21.0 billion for the three months ended December 31, 2009, driven by a 5% increase in unit volume and favorable foreign exchange.
- 2Net earnings from continuing operations rose by 12% to $3.1 billion, benefiting from a 15% increase in operating income and improved gross margins.
- 3Diluted net earnings per share decreased by 6% to $1.49, primarily due to a significant decline in net earnings from discontinued operations.
- 4The company recorded a $267 million charge related to potential competition law fines in Europe, impacting Selling, General & Administrative expenses.
- 5For the six months ended December 31, 2009, organic sales grew by 3%, demonstrating underlying business strength.
- 6The divestiture of the global pharmaceuticals business was completed in October 2009, contributing $1.5 billion in after-tax gain to discontinued operations for the quarter.
- 7Free cash flow for the six-month period was $6.6 billion, with free cash flow productivity at 83%.