Summary
Procter & Gamble (PG) reported its third-quarter results for the period ending March 31, 2011, showcasing solid top-line growth driven by volume increases across its diverse portfolio. Net sales rose 5% year-over-year for the quarter and 3% for the nine-month period, reflecting strong consumer demand globally, particularly in developing regions. Despite facing increased commodity costs and higher SG&A expenses, the company managed to improve its effective tax rate significantly, leading to an 11% increase in net earnings from continuing operations for the quarter and a 6% increase for the nine months. While the divestiture of the global pharmaceuticals business in the prior year impacted overall net earnings figures, the core business demonstrated resilience. Diluted earnings per share (EPS) from continuing operations saw a healthy increase, outpacing net earnings growth due to effective share repurchase programs. The company maintained a strong focus on returning capital to shareholders through dividends and share buybacks, underscoring a commitment to shareholder value. Investors should note the ongoing efforts in cost management and strategic divestitures/acquisitions, such as the planned merger of the Snacks business with Diamond Foods, as key indicators of future strategic direction.
Financial Highlights
50 data points| Revenue | $19.89B |
| Cost of Revenue | $9.79B |
| Gross Profit | $10.10B |
| SG&A Expenses | $6.40B |
| Operating Income | $3.71B |
| Interest Expense | $202.00M |
| Net Income | $2.87B |
| EPS (Basic) | $1.01 |
| EPS (Diluted) | $0.96 |
| Shares Outstanding (Diluted) | 3.00B |
Key Highlights
- 1Net sales increased 5% to $20.2 billion for the three months ended March 31, 2011, driven by 5% unit volume growth across all geographic regions.
- 2Net earnings from continuing operations rose 11% to $2.9 billion for the quarter, primarily due to a significant decrease in the effective tax rate from 31.3% to 21.1%.
- 3Diluted EPS from continuing operations increased 16% to $0.96 for the quarter, outpacing net earnings growth due to share repurchase activity.
- 4For the nine months ended March 31, 2011, net sales grew 3% to $61.7 billion, with organic sales up 4%, indicating consistent underlying business performance.
- 5The company repurchased $4.5 billion of treasury stock and paid $4.2 billion in dividends during the nine-month period, demonstrating a commitment to returning capital to shareholders.
- 6A significant reserve of $606 million was established for potential fines related to ongoing investigations into competition law violations in Europe.
- 7P&G announced plans to divest its Snacks business through a merger with Diamond Foods, Inc., subject to regulatory approval.