Summary
Procter & Gamble (PG) reported its fiscal second-quarter and year-to-date results for the period ending December 31, 2010. For the quarter, net sales increased 2% to $21.3 billion, driven by a 6% increase in unit volume, though this was partially offset by unfavorable foreign exchange and product mix. Net earnings from continuing operations rose 6% to $3.3 billion, primarily due to a lower effective tax rate and higher net sales, despite a decline in operating margin. For the six months ended December 31, 2010, net sales grew 2% to $41.5 billion, with a 7% volume increase largely countered by foreign exchange, mix, and pricing. Net earnings from continuing operations increased 4% to $6.4 billion. The company saw a significant decrease in overall net earnings (down 19% for the quarter and 19% year-to-date) primarily due to the prior-year gain from the divestiture of its global pharmaceuticals business. Diluted earnings per share from continuing operations saw a positive trend, increasing 10% for the quarter and 8% year-to-date, benefiting from share repurchases.
Financial Highlights
50 data points| Revenue | $20.98B |
| Cost of Revenue | $10.29B |
| Gross Profit | $10.69B |
| SG&A Expenses | $6.80B |
| Operating Income | $4.19B |
| Interest Expense | $209.00M |
| Net Income | $3.33B |
| EPS (Basic) | $1.17 |
| EPS (Diluted) | $1.11 |
| Shares Outstanding (Diluted) | 3.00B |
Key Highlights
- 1Net sales for the three months ended December 31, 2010, increased by 2% to $21.3 billion, driven by a 6% unit volume increase across most segments.
- 2Net earnings from continuing operations for the quarter rose 6% to $3.3 billion, aided by a significantly lower effective tax rate (17.9% vs. 29.8%).
- 3Diluted earnings per share from continuing operations increased 10% to $1.11 for the quarter, outpacing net earnings growth due to share repurchase activity.
- 4For the six-month period, net sales grew 2% to $41.5 billion with a 7% volume increase, while net earnings from continuing operations were up 4% to $6.4 billion.
- 5The company recorded a significant reserve of $574 million for potential fines related to ongoing European competition law investigations.
- 6Operating cash flow for the six months decreased by $2.5 billion to $5.3 billion, impacting free cash flow generation.
- 7The company continues to return capital to shareholders through dividends ($0.4818 per share for the quarter) and significant share repurchases ($3.5 billion in the quarter).